Annual Report and Accounts for the Year Ended 31 March 2018 · ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 Presented to Parliament pursuant to Section 6(4) and Section

Annual Report and Accounts for the Year Ended 31 March 2018

British Tourist Authority trading as VisitBritain & VisitEngland

Presented to Parliament pursuant to Section 6(4) and Section 6(6) of the Development of Tourism Act 1969.

Ordered by the House of Commons to be printed 23 May 2019

HC 1258 SG/2019/15

BRITISH TOURIST AUTHORITY

TRADING AS

VISITBRITAIN & VISITENGLAND

ANNUAL REPORT AND ACCOUNTS

FOR THE YEAR ENDED 31 MARCH 2018

Presented to Parliament pursuant to Section 6(4) and Section 6(6) of the Development of Tourism Act 1969.

Ordered by the House of Commons to be printed 23 May 2019

HC 1258 SG/2019/15

© British Tourist Authority copyright 2019The text of this document (this excludes, where present, the Royal Arms and all departmental or agency logos) may be reproduced free of charge in any format or medium provided that it is reproduced accurately and not in a misleading context.

The material must be acknowledged as British Tourist Authority copyright and the document title specified. Where third party material has been identified, permission from the respective copyright holder must be sought.

Any enquiries related to this publication should be sent to us at VisitBritain, 4th Floor, 151 Buckingham Palace Road, London SW1W 9SZ

This publication is available at https://www.gov.uk/government/publications

ISBN 978-1-5286-1181-7

CCS0319937480 05/19

Printed on paper containing 75% recycled fibre content minimum.

Printed in the UK by the APS Group on behalf of the Controller of Her Majesty’s Stationery Office.

https://www.gov.uk/government/publications

British Tourist Authority trading as VisitBritain and VisitEngland

Annual Report and Financial Statements for the Year Ended 31 March 2018

TABLE OF CONTENTS PAGE NUMBER

1. THE PERFORMANCE REPORT ..................................................................................1

CHAIRMAN’S FOREWORD .......................................................................................................1

OVERVIEW ................................................................................................................................2

Chief Executive’s Report ...............................................................................................2

Business Model - Purpose, Objectives and Activities....................................................4

Risk Management ..........................................................................................................7

Human rights, anti-bribery and anti-corruption ..............................................................8

The Environment............................................................................................................9

Basis of Preparation and Going Concern ......................................................................9

PERFORMANCE SUMMARY AND ANALYSIS...................................................................... 10

Performance Summary............................................................................................... 10

Financial Performance Review for the Year 2017/18 ................................................. 11

The Tourism Landscape ............................................................................................. 14

2017/18 National Policy Context................................................................................. 19

VisitBritain and VisitEngland Performance Report for the Year ................................. 20

2. THE ACCOUNTABILITY REPORT............................................................................ 28

CORPORATE GOVERNANCE ............................................................................................... 28

The Director’s Report for the Year 2017/18................................................................ 28

Statement of Corporate Governance by the Accounting Officer ................................ 31

REMUNERATION AND STAFF REPORT .............................................................................. 41

Remuneration Report.................................................................................................. 41

Staff Report ................................................................................................................. 47

PARLIAMENTARY ACCOUNTABILITY DISCLOSURES ....................................................... 53

SUSTAINABILITY REPORT.................................................................................................... 54

STATEMENT OF ACCOUNTING OFFICER RESPONSIBILITIES......................................... 57

THE CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT AND THE SCOTTISH PARLIAMENT......................... 58

3. FINANCIAL STATEMENTS ....................................................................................... 64

Statement of Comprehensive Net Expenditure .......................................................... 64

Statement of Financial Position .................................................................................. 65

Statement of Cash Flows............................................................................................ 66

Statement of Changes in Taxpayers’ Equity............................................................... 67

NOTES TO THE ACCOUNTS................................................................................................. 68



1. THE PERFORMANCE REPORT

CHAIRMAN’S FOREWORD

The tourism industry is one of Britain’s most successful industries and continues to be ambitious for the future. It is worth £127 billion to the UK employing people in every constituency, is one of our most valuable export industries worth £29.8 billion a year and is already growing faster than the digital sector. Last year £5 billion was invested in British hotels with £2.7 billion from international investors; indicating the underlying strength of the sector.

Yet Government has often found this diverse industry full of innovators difficult to engage with. That is why in my first year as Chairman of the BTA I have taken on the challenge of becoming the lead of a tourism sector bid, bringing the industry together to unite around a number of key asks of Government as part of the Industrial Strategy. These asks are about building a long-term skills campaign to make the industry one of choice, building connectivity, both physical and digital, and addressing productivity by extending the tourism season and stepping up Britain’s prowess in business events. Because of the sheer scale of the industry a small increase in productivity will have a profound effect on the British economy; increase tourism’s productivity by 1% and tourism would deliver an additional £12 billion to the economy. The conversations and visits I have had over the year with key industry leaders right across the UK have helped inform my advocacy of this bid to Government and convinced me that there is a real will to show that tourism can deliver. We await a final announcement but are hopeful that we have made a good case.

Throughout the year the BTA Board has supported me in ensuring that we make best use of Government funding. The scale of our ambition and indeed the opportunity that tourism offers Britain in both economic growth and soft power engagement as we count down to Brexit are not matched by our levels of Government funding. This year we had £19.5m core grant in aid for VisitBritain, which supports all our core activity and teams and our network of 21 offices overseas, and £6.9 million for VisitEngland. We continue to be heavily reliant on funding from the GREAT campaign of £22.1m, which is only allocated annually and is used to upweight marketing in seven high priority markets – the USA, France, Germany, Australia, China, India and the Gulf Cooperation Council – and run a UK domestic campaign.

Our England remit is largely centred around delivery of the Discover England Fund with a £10 million allocation this year. This second year of the Fund has seen some outstanding and innovative products delivered. These projects reflect the immense variety of high quality tourism product that England has to offer and it has been inspiring to see the industry react so positively to the challenge of scaling up the inbound offer. The National Quality Assessment Schemes overseen by VisitEngland has been successfully migrated to the AA as the new licensee and the team continues to work closely with the AA to retain oversight over the schemes.

The Board has also reviewed and agreed changes to the pension scheme during the year and continues to support the executive on its implementation plans.

I would like to thank all my Board for their contribution during the year. My thanks to Kevin Murphy and Margaret Llewellyn OBE who have stepped down from the BTA Board and welcome to Dame Judith Macgregor DMCG LVO. And my thanks to Denis Wormwell, who has completed his first year, as Chair of the VisitEngland Advisory Board and member of the BTA Board and welcome to Fiona Pollard and Allan Lambert who have recently joined the VisitEngland Advisory Board.

And to the Executive team lead by CEO, Sally Balcombe, who continue to punch well above their weight in delivering tourism growth across the nations of Britain and regions of England.

Steve Ridgway Chairman British Tourist Authority

1



OVERVIEW

Chief Executive’s Report

This year VisitBritain/VisitEngland has continued to deliver on its mission to market Britain overseas to drive growth in international leisure and business tourism and to maintain distinct activities to develop and market English tourism.

Our strength as an organisation is our knowledge of customers and markets. This year we have deepened that understanding by building customer segments of the best prospects for Britain and looking at how they choose and book their travel. This enables us to see where and when we can make the most effective interventions to ensure people are inspired to come to Britain and then convert that inspiration to a booking. In a digital first world you have to have great content and we have strengthened our content resource to enable us to be agile and get it to the right customers at the right time. We have moved to an always on calendar so that international travellers are continuously influenced by our activity rather than having campaign peaks and troughs. And we have refreshed our GREAT campaign to focus on the passion people have for travel and the unexpected experiences to be found in Britain with the global launch of the ‘I travel for ‘ campaign.

We amplify our message by working with a range of partners including some of the biggest names in travel. Our award winning ad campaign in the US, in partnership with Expedia, promoted regional Britain in a quirky and engaging way. Our Ctrip partnership enabled us to showcase Britain on China’s largest OTA (online travel agent). Airlines such as British Airways, American Airlines, Virgin Atlantic and Etihad have worked with us to drive conversion of consumer bookings and on new routes to deliver greater regional connectivity. We work with the Foreign & Commonwealth Office in overseas markets to ensure we are working jointly to capture tourism growth and address barriers; with shared activity and messaging. And we work with our strategic partners – the National Tourist Boards – to ensure alignment of activity where possible.

We have stepped up our activity in the business events market providing platforms for venues to meet international buyers to win events for Britain. At MeetGB we brought 120 global meetings planners to do business with 80 meeting and events suppliers from across the UK and then took the suppliers to see venues. This year our Event Support Programme awarded funds to six live bids with additional funding to five UK cities.

Our regional in-market teams have been boosted by the appointment of new Regional Directors in the Americas, APMEA and North Asia, joining the Europe Director and giving us experienced senior leadership in our international network.

We facilitated the Tourism Industry Response Group (TIER) which provided a coordinated response following the attacks in London and Manchester – enabling industry to share positive messaging and feeding in impact assessments from our international teams.

As the authoritative voice for tourism we have advised Government on issues affecting tourism, in particular supporting the development of the tourism sector bid for the industrial strategy. Our research, forecasting and insights informs Government, industry and our own activity – this year we have continued to monitor sentiment in Europe post the referendum, build a bank of research for the Discover England Fund and delivered statutory research for England that gives the size and value of the domestic overnight and day trip market.

Our England activity is focused on delivering the Discover England Fund which we have set up from scratch. So far 40 projects have been awarded funding representing over £19m of investment; all representing the best of English tourism that can now be booked and accessed by overseas visitors. We engage with a broad range of Destination Management Organisations across England; sharing best practice, facilitating meetings and sharing our research and insights.

Our Domestic marketing, largely funded by GREAT, has been focused on the millennial generation who find it easier to hop on a plane to go abroad than to holiday at home but our funds here are severely limited.

2



Chief Executive’s Report (Continued)

We have acted as a voice for England with a very successful English Tourism Week; engaging customers, the industry and MPs to promote English tourism at the start of the season and celebrating success with the England for Excellence Awards, supplemented by the Tourism Superstar award run with the Daily Mirror.

After a year of continued tourism growth, we now have a framework for us to build on achievements, review our activities and focus, in order to set a new 5-year strategy.

Sally Balcombe CEO VisitBritain/VisitEngland

3



Business Model - Purpose, Objectives and Activities

Purpose and organisational structure

The British Tourist Authority (BTA) is a Non-Departmental Public Body funded by the Department for Digital,

Culture, Media and Sport (DCMS). The functions, duties and powers of the BTA are set out in the Development

of Tourism Act 1969 (the Act). The Act defines BTA’s functions as:

Encouraging overseas visitors to come to Great Britain;

Encouraging people who live in Great Britain to take their holidays in Great Britain;

Promoting the provision and improvement of tourist amenities and facilities in Great Britain.

The BTA also has a duty to advise ministers and public bodies on tourism matters in Great Britain.

The English Tourist Board (ETB, also known as VisitEngland) is the dedicated tourist board for England and has

similar functions and the same duty under the Act in relation to England but does not have power to encourage

overseas visitors to come to England unless it is acting on behalf of the BTA. The ETB is an advisory board

responsible for advising the Executive and the Board of the BTA on English tourism matters. The ETB’s remit includes responsibility for the provision of advice to the BTA on how best to deliver English activity through an

England action plan and the monitoring of its implementation.

Strategic Priorities

Our strategic priorities continue to be:

VisitBritain VisitEngland

1. Deliver against our mandate*

2. Drive volume, value and regional dispersal

3. Represent Britain

4. Be an expert; provide strategic advice to

Government and industry

5. Grow and diversify our funding

6. Customer understanding

1. Deliver against our mandate*

2. Deliver Discover England Fund

3. Provide a voice for England

4. Be an expert; provide strategic advice to

Government and industry

5. Grow and diversify our funding

6. Product and supply understanding

*The BTA will:

Continue to market Britain overseas to drive growth in international leisure and business tourism

Maintain distinct activities to develop and market English tourism

4



Business Model - Purpose, Objectives and Activities (Continued)

VisitBritain Specific Priorities

VisitBritain plays a unique role in increasing the value and volume of tourism, developing Britain’s economy by promoting Britain worldwide by providing customer focussed marketing strategy built on content, digital and PR.

Our international network connects us with a global audience across four regions – Europe; the Americas; Asia

Pacific, Middle East & Africa (APMEA), and China & North East Asia – serviced by offices around the world.

Across these markets our priorities will be to build relationships with local trade, media and commercial partners,

as well as implementing a broad range of relevant, timely and local campaign strategies to maximise return. This

activity is based on our customer insight, our knowledge of the barriers to inbound tourism growth and our

solutions for addressing them. As well as working closely with destinations across the nations and regions, we

will act as a route to market for small tourism businesses through our travel trade, digital and retail activities and

provide advice and support to tourism providers in England on setting up and growing their tourism business.

Alongside our work with partners and the travel trade, our priority in is to be a trusted advisor to Government

and industry on matters affecting Britain’s standing as a leading tourism market, particularly those that affect the

UK’s international competitiveness, making the case for tourism to be prioritised in policy making by providing policy solutions, market intelligence and customer insights.

VisitEngland Specific Priorities

In 2017/18 VisitEngland is continuing its work on the implementation of the Government’s Tourism Action Plan, as part of its wider strategic objectives to grow and support the English tourism industry. Round 2 of the Discover

England Fund offered investment opportunity for the industry, with funding for large scale collaborative projects

led by Destination Organisations. Outside of the Discover England Fund, wider product development has

remained a significant priority; including a focus on England’s food offer and the improvement of the marketing,

distribution and accessibility of tourism. Following on from Parliament’s Rural Tourism Inquiry, we have continued

to build on the recommendations of the Select Committee and the successes of 2016/17 in developing England’s rural and coastal tourism offer, by incorporating this offer into our wider marketing campaigns and industry

engagement in 2017/18.

VisitBritain and VisitEngland Priorities

Britain is the best value it has been in over a decade yet interest in Britain does not automatically convert into

visits. We need to drive conversion and advocacy to convert interest and appetite to travel into solid bookings

through a focused marketing campaign, building our social media presence to maximise the opportunities of

new technology and developing relationships with key influencers. We will use data and analytics to deliver

a more bespoke offer, ensuring that we reach our targeted audience with appropriate content at every part of

the customer journey and working with our partners to drive through bookable product to deliver conversion.

We will communicate with people in their own language and build advocates for England and Britain who

amplify our messages in their own social channels.

5

RPORATE PRIORITIES - SUMMARY



Business Model - Purpose, Objectives and Activities (Continued)

VisitBritain and VisitEngland Corporate Priorities for 2018/19

1. Build Tourism’s value across the nations and regions – and deliver positive results with the GREAT fund

Focus on seven GREAT markets and key customer segments/channels within these markets

Digital and content will drive marketing activity – moving to an always on approach

Launch I Travel for … to capture new markets and drive future travellers to consider Britain

Re-align marketing activity to up-weight England and London to bring them back on target

Ensure that bookable tourism product is successfully distributed into International markets

2. Manage the Discover England Fund

Oversee the successful delivery to market of the group of £1million plus projects

Launch a further set of 1 year small product development projects

Deliver the pilot test phase of the Discover England digital platform

3. Advise on Tourism Growth

Continue to support the Tourism Sector Deal bid and implementation as appropriate

Deliver research and insights on the domestic market and tourism industry

Deliver International market intelligence to support decision making across the industry

4. Deepen our partnerships to leverage their reach, innovation and value

Build the commercial partnership portfolio aligned to key customers/markets and VisitBritain objectives

Shape breadth of product suppliers to provide routes to market through retail and trade

Create effective joint activity and shared outcomes with Visit partners

Ensure cross agency working with government partners to support tourism growth

5. Deliver business events wins Build a pipeline of target events and raise awareness and create the case

across the UK

to win selection

Develop new business events assets, data and insights to support the industry

6. Drive towards operational excellence

Develop the People Strategy to deliver on reward, recruitment, performance and learning

Develop an IT strategy for future proof key enabling systems

Continue to review and improve internal processes

Further details can be found in the Performance Report for the Year section, (pages 20-27).

6



Risk Management

BTA’s strategy is to recognise that good risk management can add value to its work by increasing the likelihood that the organisation will achieve its objectives and targets and by enabling it to take action to reduce the impact

if something goes wrong. Good risk management also enables VisitBritain and VisitEngland to exploit

opportunities in a managed way. It helps us to use resources more effectively and leads to better decision-making

and management of activity. At the heart of our risk management process are integrated planning, allocation of

responsibilities and budgetary control.

We aim to manage risk at an appropriate level to achieve aims and objectives and comply with our policies. We

cannot eliminate all risks, so we aim to reduce risk to such a level as is reasonably practicable. The risk

management policy encourages the taking of controlled risk designed to maximise new opportunities and to

promote the use of innovative approaches to further the interests of BTA and to achieve its objectives, provided

the resultant exposures are within our risk appetite.

Our corporate risk register is kept under review by the Executive Directors, the Audit Committee and the Board;

the principal risks and uncertainties are reviewed and scrutinised under our Assurance Framework and

subsequently within our internal audit work programme.

Our targets are primarily related to increasing visitor numbers and spend: in VisitBritain’s case, the ability to deliver

can be affected by changing economic factors such as foreign exchange fluctuations, changing conditions in

market and economies and politics, changes in air capacity, or world events such as terrorist attacks and

pandemics. Any of these factors can lead to potential visitors deciding not to come to Britain. We therefore

endeavour to maintain the flexibility to rapidly switch our activities between markets to mitigate any detrimental

effects.

Risks of this nature also threaten VisitEngland’s ability to meet its targets: for instance a strengthening pound or poor weather can lead to UK residents substituting a domestic holiday with an overseas one.

Brexit

The UK’s decision to leave the European Union (EU) and consequent preparations for 2019 appear to have had

some impact on sentiment towards Britain and tourism in the European markets. On the other hand over the last

financial year the lower value of the pound has helped to create opportunities; whether for British citizens to

consider staycations or encourage international tourists to travel to Britain to take advantage of the lower value of

the pound.

Overseas Currencies

As an international organisation, we trade in several currencies around the world and are therefore exposed to

movements in currency markets. A Foreign Currency Policy is in place which complies with the guidance in

Managing Public Money; the BTA operates within this framework to proactively review and manage currency cash

flows, bank balances and foreign currency requirements, to plan forward purchase or sale of currencies which

provides for some financial stability for overseas operations and represents the most effective approach to mitigate

foreign currency risk.

7



Risk Management (Continued)

Pension Scheme

Pension liabilities continue to be a key focus for the BTA, its Board and Sponsor. The BTA, having established a

strategy in respect of pension risk and provision, consulted staff during 2017 regarding the British Tourist Boards’ Staff Pension and Life Assurance Scheme (BTBSPLAS) and its closure to future defined benefit accrual. The BTA

executive, Pension Trustees and Trade Union representatives worked constructively through this period to ensure

an open process for staff. Following the conclusion of the consultation period the proposal was approved by the

Board, Department for Digital, Culture, Media and Sport and HM Treasury. However, VisitScotland was unable

to agree the proposals due to wider BTA/VisitScotland considerations in connection with the provision of

government support. Discussions with all stakeholders is ongoing and BTA is hopeful that agreement can be

reached by mid-2019 on both government support and the closure to future accrual. At the time of this report, in

regard to government support, the Parliamentary Under Secretary of State for Arts, Heritage and Tourism, (for

Department for Digital, Culture, Media and Sport), has notified Parliament of its intention to provide a Guarantee

to cover the shortfall between the scheme’s assets and its liabilities should the BTA close down.

In the meantime, we are discussing the principles and assumptions of the triennial actuarial valuation as at 31

March 2018 with the Trustees, along with the investment strategy and the possibility of paying further contributions

to improve the funding position of the Scheme.

The BTA also took steps as part of its pension provision strategy to mitigate future pension liabilities by introducing

a new defined contribution scheme, for new starters from 1 April 2017 which is separate to the BTBSPLAS scheme

structure.

Human rights, anti-bribery and anti-corruption

BTA’s employees constitute its greatest asset. In order to ensure a high quality workforce it is vital that we provide a work environment that is underpinned by a culture of integrity and equality, while embracing diversity of the communities that we serve. BTA supports the protection of Human Rights and have policies and processes in place to ensure that all employees act in accordance with the organisation’s values which encompass areas such as business conduct, equal opportunities, anti-corruption and whistleblowing.

Following the introduction of the Bribery Act 2010 BTA introduced a policy on bribery and corruption for all employees to strictly adhere to. Management ensures that the policy is complied with, and updates the policy and procedures as and when required. All staff are trained on these aspects at the commencement of their employment and staff are reminded of their obligations in this regard as part of their annual compliance declarations.

Further information on our employment practices are discussed in the Staff Report section of the Accountability report.

8



The Environment

Every organisation needs to be aware of the impact of its operations on the environment. BTA is conscious of the need to use scarce resources as efficiently as possible, to minimise waste and to acknowledge its responsibility to limit harmful emissions wherever possible.

BTA’s contribution to the environment is measured through to key areas:

• Carbon footprint

• Waste management

BTA is proud of the progress made in these areas during 2017/18. The fruits of our efforts and everyone’s commitment to play an active role in promoting sustainability throughout the organisation, is evident in the remarkable improvement in our key performance indicators compared to 2016/17. Our total CO2 emissions reduced 29% on the previous year, and both energy and water consumption was down 42% on 2016/17 figures. In addition, our total waste output reduced 11%.

BTA takes its responsibilities towards the environment seriously and remains committed to promote sustainability in the workplace.

Basis of Preparation and Going Concern

The financial statements have been prepared on a going concern basis as set out in Note 1 on page 68.

Sally Balcombe

Accounting Officer

BTA

13 May 2019

9



PERFORMANCE SUMMARY AND ANALYSIS

Performance Summary

2017/18 Key Performance Indicator

The following are the key targets agreed with DCMS against which VisitBritain/VisitEngland is measured.

Other deliverables are set as part of the organisational business plan and explained in the Performance Report

for the Year.

Core

Marketing

Programme

Indicator

Description

Incremental

Visitors Spend

Definition

The amount visitors spend in Britain

that resulted from VisitBritain

interventions

Result for

2016/17

£488.9m

Target

for

2017/18

*£860m

Result

for

2017/18

£548.9m

GREAT

Campaign

Incremental

Visitor Spend

The estimated visitor spend in

Britain that resulted from VisitBritain

interventions

£262.8m

* £340.8m

* 2017/18 incremental visitors spend target is for both GREAT and Core.

10

Financial Performance Review for the Year 2017/18



Source of Funding

During the period covered by these accounts, BTA was funded from the following sources:

Core grant-in-aid from DCMS.

GREAT Programme: once again a significant proportion of funding was provided under the GREAT brand

for international image campaigns and a campaign to persuade people to holiday in Britain.

Discover England Fund (DEF) which is a three year funding programme to encourage incremental visitor

spend in England.

Additional one-off Grants were received for Loch Ness and Mayflower projects.

Revenue generated through other activities including the VisitBritain online retail shops.

The overall income (both grant-in-aid and non-grant-in-aid income) for 2017/18 totalled £94.8m (2016/17 - £91.4m)

which includes gross revenue from retail operation.

Grant Funding Grant budget allocation for the year amounted to a total of £60.4 million, an increase of £2.6m (4%) from

2016/17 (£57.8million). The funding allocation included the £10m for the Discover England Fund, a fund that totals

£40m over a 3-year period to 2018/19.

The table below reconciles GIA Budget and Cash Allocation per DCMS Funding Agreement; which reflects a higher

level of GIA cash drawdown at £60.633million due to £250k additional funding given in March 2017 (namely 2016/17

financial year) but cash was drawn in 2017/18.

BTA Funding - 2017/18

VisitBritain VisitEngland BTA (Total)

£'000 £'000 £'000

GIA Original Management Agreement 19,554 6,978 26,532

Capital GIA 966 966

GREAT Funding 19,625 2,500 22,125

GREAT fund transfer from VE to VB 0

Discover England Fund (DEf) 11,500 11,500

Discover England Fund (DEf) - budget c/f to 2018/19 (1,500) (1,500)

Other Funding 500 260 760

Total Grant in Aid (Budget) Allocation per the DCMS Funding Agreement 40,645 19,738 60,383

Cash GIA allocation for activity in 2016/17 (Europe Campaign) 250 250

Total Grant in Aid (cash) Allocation per the DCMS Funding Agreement 40,895 19,738 60,633

* DEf includes £200k capital budget allocation specific for Research & Development activities

11



Financial Performance Review for the Year 2017/18 (Continued)

Other Income (non-GIA Income)Income from non-GIA funded activities decreased by (0.8%), in 2017-18 compared with 2016/17; from £34.5 million to £34.2 million (see Notes 6 and 7 to the Accounts). The main variances were:

Income from commercial activities decreased by £0.6 million (or 2%) as a result of the continuing challenge of online retail activity;

Income from partnerships activities increased by £1.2 million (or 49%) following increased allocation of Great funding on campaigns with partners;

There was also a decrease in other income mainly due to a one off income received last year relating to backdated overseas VAT refund (see note 7).

This was partially offset by increased other grant income received from FCO for a joint campaign; Income from exhibitions, workshops and fairs increased by 8%, reflecting a more appropriate contribution

and recharge of fees to participants at trade fairs.

Expenditure The overall expenditure (excluding employee benefit costs) in 2017/18 increased by £1.3 million (or 1.7%) to £77.2 million due to a number of factors. A substantial part is attributable to foreign exchange translation losses which were £341k compared to an accounting gain of £491k in 2016/17. Irrecoverable VAT was another factor which contributed to the cost increase in 2017/18.

Analysis of Total Expenditure (%)

0

5

10

15

20

25

30

35

40

45

50

Project costs Retail cost of sales

Staff costs One off re-organisation

costs

Other operational

costs

49%

26%

18%

0%

6%

48%

27%

19%

1% 6%

£'00

0

2017/18 2016/17

12



Financial Performance Review for the Year 2017/18 (Continued)

The other main changes in operating costs were (see note 8, 9, 11 and 12):

A £251k decrease in commercial cost of sales, driven by the decrease in online retail sales;

Decrease of £1.4 million in Partnership marketing, media and publication costs,

Research and evaluation costs reduced £515k following increased research activities in 2016/17 as a

result of additional investment from DEF and Great funding;

Increase of Grant payments to Destination Organisations by £1.2 million was mainly due to more funding

allocation in 2017/18 from the Discover England Fund;

increase in the irrecoverable VAT by £419k to £4.2 million which is due to a reduction in commercial

income, resulting lower vat recovery rate;

A reduction in reorganisation costs to £236k, £429k down from the £665k in 2016/17;

An £662k increase in UK property and support costs, mainly incurred in connection with the relocation to

new Head Office premises during the year.

Pension Schemes Employee benefits, including pensions and other post-retirement benefits form part of our people strategy; part of

the employee proposition the pay and reward strategy is a means to attract and retain staff. Benefits such as

pensions have both annual cost implications but also longer term financial commitments that require close and

ongoing attention.

Following the last full valuation of the scheme, the employers agreed a deficit recovery plan with the trustees. The

plan requires BTA to pay in a proportion to its share of the deficit. BTA’s pension contributions for 2017/18 totalled

some £2,518k (2016/17: £1,338k); with current employer contributions in respect of future service being 24.4%

for members with a retirement age of 60, and 13.1% for members with a retirement age of 65. BTA also has an

additional unfunded pension liability of £168,000 (2016/17: £177,000) for pension payments to former chairmen

which is included in the Statement of Financial Position. Further details are presented in these financial statements

in accordance with the amended IAS 19 ‘Employee Benefits’ - see note 25.

Working Capital

Net working capital increased by approximately 15% or £299k. The main contributors to this increase were

significantly higher cash balance compared with 2016/7, partly negated by lower receivables and increased

payables levels at year end. These levels reflect a part postponement in the BTA’s usual spending cycle, resulting

in an amount of budget spend delayed until the fourth quarter of the financial period, driving working capital levels

up, in particular cash and accounts payable.

Creditor Payments Policy

BTA is a signatory to the Confederation of British Industry code of practice on supplier payment and is committed to

the payment of its suppliers to agreed terms or within 30 days. From 1 November 1998 the organisation has

incorporated into this policy the regulations contained in the Late Payment of Commercial Debts (Interest) Act 1998.

There were no claims for interest payment under the terms of this Act in this financial year. Since January 2013, BTA

has committed to the Government pledge to pay its suppliers, wherever possible, to the agreed terms or within 10

days and is monitoring progress against this target. During 2017/18 65% (2016/17: 66%), of suppliers’ invoices not in

dispute were settled within these parameters. The results for paying invoices within 30 days are as follows: 91 % in

2017/18 and 91% in 2016/17.

Sally Balcombe Accounting Officer

BTA

13 May 2019

13



The Tourism Landscape

Inbound Trends

2017 Inbound Tourism in Numbers

2017 saw a record £24.5 billion in overseas visitor spend1, 9% up in nominal terms on 2016.

This is the fastest rate of growth in spending since 2013 and the second fastest since 2006.

There were 39.2 million visits to the UK from overseas, up 4% on 20161, a similar rate to that seen in

recent years.

Visits grew rapidly in the first half of the year, up 10% in Q1 and 9% in Q2 compared to 2016. Visits grew 4% in

Q3 although fell 5% in Q4.

The increase in average spend per visitor is in contrast to the decline in spend per visit that had been seen in

2014-16.

Figure 1 - Year-on-year Change in Visits and Spending

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Visits Spending

Trip Purposes

Growth was led by holiday visitors in 2017, with visits 11% up on 2016 to 15.4 million. This was the fastest rate of

growth in holiday visits since 2004. While the fourth quarter of the year saw a decline in holiday visits, there was

20% growth in the first half of the year and 9% growth in Q3 (July-September).

Visits to friends and relatives (VFR) also set a new record in 2017, up 4% on 2016 to 12.0 million visits.

After seven years of growth, business visits fell back in 2017 to 8.8 million visits, 4% less than the record set in

2016.

Figure 2 - 2017 Purpose of journey of inbound tourists to the UK1

Holidays

+11%

VFR

+4%

Business

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+3%

15.4 million 12.0 million 8.8 million 3.1 million

1 International Passenger Survey 2017 figures

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The Tourism Landscape (Continued)

Regions and Nations

Figure 3 – inbound visits to the nations and regions of the UK1

Visits (000s)

Growth

Scotland 3,210 17%

Wales 1,079 0%

London 19,828 4%

Rest Of England 16,496 3%

North East 556 -1%

North West 3,138 11%

Yorkshire 1,341 -2%

West Midlands 2,322 6%

East Midlands 1,281 -4%

East Of England 2,407 0%

South West 2,584 3%

South East 5,320 2%

UK TOTAL 39,214 4%

Visits to London were up 4% in 2017, to a record 19.8 million.

Spending too set a record of £13.5 billion, up 14% compared to the

previous year.

Visits to England outside London were up 3%, resulting in a record

of 16.5 million visits. Spending was the same as in 2016: £7.8 billion.

There were 1.1 million visits to Wales, the same as in 2016.

However, spend decreased by 17% compared to the record set in

2016 to £369 million.

Scotland posted record breaking inbound numbers in 2017. There

was a 17% rise in the number of visits, resulting in 3.2 million visits.

Spending grew 23% to a record £2.3 billion.2

Market View

Growth in visits came from a range of markets across the world, although in general visits from long-haul markets

grew at a faster rate than short-haul in 2017.

Visits from Europe grew 1% to a record 28.1 million. Visits from North America were up 11% to 4.7 million and

visits from the Rest of the World were up 14% to a record 6.3 million.1

Looking at visitors to the UK from individual countries, growth was led by some large emerging markets:

China: visits were up 29% to a record level of 337,000 visits - almost twice as many as in 2012. Spending

has also set new records; Chinese visitors spent a total of £694 million, 35% higher than in 2016.

India: set both new visit and spend records. There were 562,000 visits (up 35% compared to 2016) who

spent a combined £454 million (up 5% on 2016).

Brazil: after a tough 2016, both visit and spend levels from Brazil to the UK rebounded. There were

244,000 visits in 2017 – 31% more than in 2016. Visitors spent £263 million – 34% more than 2016.

Russia: the market has also rebounded after a sharp fall between 2014 and 2016; visits were up 55% to

227,000 and spending 70% to £188 million.

Visits from the United States, the UK’s most valuable inbound source market, were up 13% to 3.9 million – just

short of the record set back in 2000. USA visitor spending reached record levels at £3.6 billion, up 9% on 2016.

15

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The UK also saw double digit visits growth from long haul markets such as South Africa and Australia in 2017.

Amongst European markets, visits growth above the global average was seen from a few markets, including

Belgium and Romania. Visits from Irish Republic, Netherlands and Switzerland grew at around the global average.

Lower growth was seen from markets such as Germany, Austria, Spain, Sweden and Norway. Denmark equalled

its performance in 2016. Several major European markets saw declines in visits in 2017, including Poland, France

and Italy.

Links to international markets across the country are seeing improved access, with direct air capacity to the UK

up 5% in 2017 compared to 2016, following on from 10% growth in 2016. Direct seat capacity from the United

States rose by 2%, Canada 4%, China by 6% and from the UAE by 1%, although capacity from Brazil fell by 12%

and Saudi Arabia 2%.

Figure 4 - Growth in visits to the UK between 2016 and 2017, by market

Competitive view and forecast

Inbound overnight arrivals to the UK grew at 5% in 2017, a similar pace to some competitor destinations such as

France, Germany and Canada. Several leading mature destinations grew by a faster pace, including Netherlands,

Spain, Italy and Australia. However, the UK saw higher growth than the Republic of Ireland and USA.

Globally, overnight tourism arrivals grew by 7%, a slightly faster pace than the UK saw. Within this, total visits to

Europe grew by 8%. However, in value terms, inbound spending in the UK rose by 9%, ahead of the global

average of 5% in local currency terms, and slightly ahead of the European average of 8%. The UK therefore lost

share in volume terms but gained share in value terms.2

2 UNWTO Barometer October 2018

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Figure 5 - Growth in inbound overnight visits, by destination, in 20172

Destination Growth in visits

Netherlands 13%

Italy 11%

Spain 9%

Australia 7%

Switzerland 7%

France 5%

Germany 5%

UK 5%

Canada 4%

Rep. of Ireland 2%

USA 1%

The 2018 Anholt Nation Brands Index survey ranked Britain as the 4th strongest tourism nation brand overall, the

4th for contemporary culture and the 7th for cultural heritage, and the 5th most aspirational destination to visit, if

money was no object.

Domestic Trends

Domestic Overnight Tourism3

In 2017, the total number of domestic overnight trips taken in England rose by 1.3% to 101 million. The number of holiday trips increased by 6% to 47.2 million, which is on par with the previous record set in 2009. While the number of business trips remained relatively unchanged, there was a decline of 1% in the number of trips for visiting friends and relatives (VFR).

2017 saw a continuation of the trend for an increased number of short breaks of 1-3 nights, which increased by 7%. The number of longer breaks of 4+ nights has in recent years remained unchanged, however in 2017 they increased by 3%.

In the VFR sector, trips to visit friends and relatives for both holiday and non-holiday both saw a decline of 1%.

3 Great Britain Tourism Survey 2017 report 17




2017 saw an increase of 3% in overall expenditure from domestic overnight trips.

The amount of expenditure on holiday trips increased by 6% to £11 billion, which is on par with the previous record year of 2012. VFR saw an increase of expenditure of 1%, driven entirely by trips to visit friends and relatives for holiday purposes, while business trip expenditure fell by 2%.

Domestic Day Visits4

In 2017, the overall volume of tourism day visits declined by 3% to 1.5 billion.

Expenditure declined by 5% to £51 billion, driven mostly by a decline in ‘special shopping items that you do not regularly buy’ which decreased by 20%, a drop of £2 billion, returning to a similar level seen in 2015.

4 Great Britain Day Visits Survey 2017 18



2017/18 National Policy Context

Statutory Duty to advise government

The BTA continues to engage with a wide and varied number of stakeholders.

68 MPs took part in English Tourism Week constituency days supporting their local tourism industry and visiting businesses. Over 2017/18, the Tourism Affairs team met with over 80 MPs, and Ministers in eight Government Departments, including hosting a series of roundtable events. The BTA has held a number of events in parliament, including the annual China APPG event. The BTA continues to work beyond Whitehall and has met with Metro Mayors and Local Enterprise Partnership chairs, as well as devolved politicians and ministers.

Tourism Sector Deal

The BTA has supported the submission of a bid for a Sector Deal in the Government’s Modern Industrial Strategy. This bid has been led by Steve Ridgway, the BTA Chairman, and a series of meetings have been held with the Business Secretary, Ministers, and senior officials to press the case for a deal. In November 2018 the Government announced it would enter into negotiations with the tourism sector on an ambitious industrial strategy sector deal. In the first part of 2019 VisitBritain is working with the sector to gain further clarification and commitment from industry.

The industry has committed significant resource and money to supporting a new skills campaign, and helping to develop a model for a series of Tourism Zones.

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VisitBritain and VisitEngland Performance Report for the Year

Performance against the 2017/18 corporate priorities.

1. Deliver tourism growth across the nations and regions

Developing Regional Hub Strategies

2017/18 has seen a wealth of activity undertaken to deliver tourism growth across the nations and regions of Britain.

We developed our understanding of our global customers, their customer journey, triggers that would make them travel to Britain and the best partners and channels for us to reach them. This deeper understanding allowed us to assess the size of the target audience in each market and develop Regional Hub Strategies in our overseas markets to identify which of our customer segments held the biggest opportunity in each region.

Two global audience segments emerged as key for inbound tourism to Britain – the BuzzSeeker and the Explorer, more detailed profiles can be found on our website. The hub approach has allowed us to develop clear integrated market plans identifying the right time and channel to engage with our consumers.

Partnerships We partnered with the regional gateway of Manchester to support the new direct Virgin Atlantic routes from Boston and San Francisco. We also partnered with Birmingham and various other partners in the West Midlands to leverage new flights by low cost carrier Primera.

Our brand partnership with Warner Bros. on the release of King Arthur: Legend of the Sword was used to drive urgency to visit exciting locations across England, Scotland and Wales. The fully integrated activation ran in the US, Australia, Germany and France across channels including Facebook, Instagram, Snapchat, Digital billboards, influencer trips and more. Our partnership with the Premier League continued into its 10th year promoting towns and cities across Britain that are home to a Premier League club pushing content that showcases what else there is to do beyond the game.

PR and Influencers Our PR agenda continued to support activity across the organisation. We worked with all four nations to create an integrated campaign - 24 Hours in the UK - a video project to showcase the best moments across a 24-hour day. This focused on our domestic Gen Y audience and had over 30,000 engagements across social media with an additional 500,000 people reached through traditional PR outlets. The footage was also used across owned and commercial partner channels, further increasing the reach.

Our domestic always on activity saw us implement a strategic year-long ambassador programme of micro-adventure programmes that targeted Gen Y audience with thematic, seasonal content via influencers to highlight the diverse and exciting experiences visitors can have just a few hours from home. The areas covered were spread across England and included themes such as adventure, city breaks, food, seaside and countryside. Over the course of the year over 1.1 million of our target audience had the opportunity to see this content.

Content We continued to create and amplify content promoting Britain’s nations and regions on our social media channels. A magical map of Britain, which showcased destinations right across the country, from the Isle of Skye to Cornwall had a reach of over 250k on Facebook and was liked more than 18K times on Instagram. We also produced a map showcasing England’s literary locations which had a reach of 1.4 million on Facebook, and was shared 10K times.

Following the completion of our content strategy, we piloted a new approach to co-creating content with England’s destination marketing organisations. This provided us with a suite of content promoting Bristol, NewcastleGateshead and Yorkshire for our global target audiences.

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VisitBritain and VisitEngland Performance Report for the Year (Continued)



Business Support We continued our business support by implementing key recommendations from TEAM Tourism Consulting to rebuild and reposition the Business Advice Hub as the principal on-line portal for English tourism businesses looking to grow.

In June 2017 VisitEngland, in partnership with VisitScotland, launched a new Accessibility Guides website to help businesses market themselves to those with disability requirements.

We facilitated three workshops, hosted by destination organisations and delivered by Barclays Digital Business Eagles, to help SME’s make the most of digital.

The VisitEngland Awards for Excellence 2017 – which welcomed 67 finalists across 22 categories – were presented at an afternoon tea ceremony hosted by Sue Perkins at London’s Waldorf Astoria on 24 April 2017. The VisitEngland Awards for Excellence 2017 competition was launched and judging was completed for 343 applications across 18 categories. Four commercial sponsors were secured and a strategic review of the Awards instigated.

Quality Schemes In April 2017, a contract was awarded to the AA to run VisitEngland’s Quality Assessment Schemes under licence as VisitEngland Assessment Services. Progress has been made on developing the schemes and providing advice and support for participants to help them grow their business.

2. Delivery of the Discover England Fund

The second year of the Discover England Fund has seen some outstanding and innovative products delivered. These projects reflect the immense variety of high quality tourism product that England has to offer and it has been inspiring to see the industry react so positively to the challenge of scaling up the inbound offer.

Early successes include 14 new, market-ready products across all England’s regions, from the packaging of itineraries along the South West Coast Path to an innovative augmented reality experience in Durham Cathedral and 13 other historic sites across the country. These new tourism products increase the competitiveness of England’s tourism offer for the consumer and travel trade.

40 projects in total have been awarded funding, representing over £19m of investment. Successes to date from pilot projects delivered in Year 1 (2016/17) include:

160 bookable itineraries and product clusters

39 fam trips (press and trade)

Over 1,200 individuals engaged across a range of product workshops and events

Sales of 1,365 passes and packages

Improved partnership working among tourism stakeholders

Evaluation of Year 1 projects have been completed, and a final report of the findings was delivered in February 2019. At time of publication of this Annual Report, the evaluation report had not yet been fully signed off by BTA’s Programme Management Board. A travel trade economic impact assessment was also undertaken as part of this with a selection of projects that are particularly driving travel trade as a route to market.

12 large-scale projects granted £1 million each were announced in the summer and are now in delivery to create

a step change in bookable tourism product in England; these projects have seen nationwide partnerships forming

between destination organisations and other public and private sector partners which will continue to drive forward

delivery in 2017/18.

Eight pilot projects have been granted up to £500,000 to trial approaches to product development in 2017/18; the

projects delivered to timescale and opportunities to extend activities into 2017/18 were offered where a clear

demonstration of success and value added could be shown.

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A dedicated Discover England Fund microsite aimed at the travel trade was developed and went live in September

2017. The site showcases the projects, their bookable products and information to help with the development of

future England tour programmes.

National investment was made to develop new partnerships with six Destination Marketing Companies (DMC’s) and establish distribution partnerships to support getting new regional products out to market internationally.

Activities have included product development, training, educational trips, sales support, incentives and shared

marketing.

We have continued to conduct further research to support the industry and Discover England Fund projects

including concept testing with the consumer and travel trade across Large Scale bids and delegate expenditure

and business extenders research to support the Business Events Sector.

A successful Discover England Fund conference also took place for industry stakeholders in July 2017 to share

the learnings from Year 1; further events will follow in 2018/19 once Large-Scale projects are well underway with

delivery and progress.

3. Deliver and amplify the GREAT#OMGB marketing campaigns

In February 2018 we launched our new global marketing campaign ‘I Travel For…’ to boost inbound tourism to Britain. The campaign was created based on the passion points that we know our international customers travel for. It uses short films and story-telling to highlight unexpected experiences, less explored destinations in Britain, as well as Britain’s globally renowned iconic landmarks and attractions. The digital campaign kicked off internationally with a launch film on Facebook and Instagram and was followed by a series of videos and images promoting destinations across Britain in partnership with National Geographic.

Partnerships We partnered with 20th Century Fox on the release of the Kingsman 2 film in the US market where we ran a digital activation in partnership with Expedia focusing on exciting, high-end experiences.

PR We continued to run a series of global GREAT trips targeted at international media and promoting travel around the country. This year saw trips to Wales, the south west and central England showcasing the best offers for adventure, food, royalty and luxury amongst other things. The publications on this trip provided access to over 65 million opportunities for our target international audiences to see inspiring content.

The international always on activity continues to promote travel to the nations and regions based on the trigger points of our target audience. To date we have created 2.2 billion opportunities for our target international audiences to see inspiring content about Britain with details on how they can find out more and book.

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4. Deliver Research and insights to inform Government, industry and our marketing activity

Delivering Research and Insights to Inform Government & Industry VisitBritain regularly keeps the tourism industry informed about the latest inbound tourism statistics and insights across many topic areas through regular publications and its corporate website. This included:

Publishing data on our website from the International Passenger Survey using an interactive data tool,

allowing users to tailor the most relevant inbound tourism statistics

Releasing 19 market profiles during 2017-18, giving an in-depth view of key visitor source markets, as well

as two-page infographics that deliver the most crucial facts

Publishing thematic reports providing in-depth analysis on subjects including: The Visitor Experience of

tourists in the UK; How the World Views Britain; Regional Spread; Perceptions of Britain and its Competitors

VisitBritain has advised the Government on issues affecting welcome through the ‘Welcome to Britain’ group and tourism through Brexit. We ran the third and fourth wave of our post-referendum sentiment research in September 2017 and March 2018. This was an online survey in seven European markets (France, Germany, Italy, Netherlands, Poland, Spain and Sweden) and two long haul markets (China and USA), focussing on themes including welcome, value for money and intent to visit.

In addition, VisitBritain formulated the inbound tourism forecast for Britain. The original forecast for 2017 was released in December 2016 and forecast visits growth of 4.0% and spending growth of 8.1%. This was revised to take account of the latest available data in July 2017 and again in November 2017. The final forecast was for visits growth of 6.2% and spending growth of 11.6%. The forecast for 2018 was for visits growth of 4.4% and spending growth of 6.8%.

VisitEngland delivered its statutory research obligations, specifically the Great British Tourism Survey and Day Visits Survey (monthly and annual reports), Annual Attractions survey (annual report) and England Occupancy survey (delivered twelve monthly reports).

In addition, we delivered a bank of dedicated Discover England Fund (DEF) market research and insights, including:

DEF project research - summary reports for twelve large-scale DEF projects

Travel Trade research – second phase of research, looking at concept testing large scale DEF

projects amongst key travel trade partners

Activities / themes – International market level analysis for key activities and themes by demographic,

attitude towards holidaying in England, market consideration for activities

Outdoor activities research – carried out in US, France, Germany, Netherlands and UK

Two pieces of Business Events research – Motivations & Barriers; Delegate Expenditure

Inbound analysis and future trends - Inbound Day Trip analysis; Destination summary reports; Future

trends identification

Our dedicated industry website is a one-stop shop on English and British tourism for the industry, providing a wealth of official statistics and other market research and resources:

Insights, research and statistics on inbound tourism to Britain and on the domestic tourism landscape for England

Wide-ranging business advice and support Opportunities for destinations and businesses to reach international and domestic markets Support for English tourism businesses on hot topics such as visitor perceptions on key destinations Inbound market and customer-based insights and market profiles, alongside trend analysis

These materials enable the sector to adapt and grow. The website received over 1.2 million visits between April 2017 and March 2018.

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We produced a regular industry newsletter signposting industry to the latest research and insights, distributing it to over 13,000 recipients in 2017/18. In addition we reached thousands of individuals and organisations through our Twitter (over 28,000 followers) and LinkedIn (over 24,000 followers) channels.

We also facilitated the Tourism Industry Emergency Response Group (TIER), which provided a coordinated response following the terror attacks in London and Manchester; including coordinating media lines to make it clear Britain and its attractions remained open for business, and providing coordinated impact assessment to government. TIER also monitored the potential impact of the Russian Spy incident.

We continue to share our insights and research with a wider audience, communicating the importance of tourism to the UK economy regionally, nationally and internationally through our corporate/industry PR. This activity positioned us as the go to experts on tourism matters, shaping the national media narrative by regularly communicating the value of tourism to the economy and raising the industry’s profile to the public and stakeholders, providing a voice for tourism.

In the last year we secured more than 6,500 pieces of press coverage in national, regional, trade and international press (online, print, broadcast) – covering our activities as well as the latest tourism news.

Delivering research and insights to inform our Marketing Activity

Segmentation and customer journey research. We have identified five global segments through research carried out across key markets (Australia, China, India, USA, France, Germany, Netherlands, and GCC) and detailed, segment level customer journey maps. These insights allow our marketing and overseas teams to target and message our audiences with greater efficiency. The segmentation framework will be implemented across all international marketing activity to provide analysis of campaign effectiveness at a segment level.

We are using innovative analytical data practice to make key marketing decisions, optimise performance & ROI:

Strategy definition and investment decisions: We have implemented integrated tagging and tracking which means we have accurate performance data across all our campaigns and can understand what did and did not work well at a detailed level. This informs our strategy development and investment decisions. Agile approach to marketing: we have implemented a “data analysis self-service” project, creating automated dashboards so senior VisitBritain management can view and interact with insights and performance data on a near real-time basis. This allows us to be more agile, addressing opportunities and issues as they occur during campaigns. Using data to reach the right customers with the right content: we use data to better understand, segment and target our users. This means we can produce targeted content to reach the right user at the right time. Using data to influence product development: Data gives us a better understanding of why people come to the UK – we use this to inform our product development work.

5. Deepen our partner relationships to leverage value

Engaging with Destinations & Public Diplomacy Partners We ran the English Destinations Forum in November 2017 to enable the sharing of best practice in destination management. We set up regular coastal and rural destination steering groups to enable us to more effectively engage with and support coastal and rural destinations.

English Tourism Week, held from 17-25 March 2018, yet again provided a platform for the industry to highlight tourism offers, events and resident festivals at the beginning of the spring season. Our Tourism Superstar campaign with the Daily Mirror celebrated exceptional customer service across the country and encouraged over 20,000 votes by the public. Both activities were supported by consumer marketing activity and by an engagement programme with MPs, with 68 MPs visiting a tourism business on Constituency Day.

We have a structured and effective process of engagement with our strategic partners – London & Partners, Visit Scotland and Visit Wales. They are represented on the BTA board, we have annual business events and leisure business planning sessions and we convene regularly to share best practise, plan and deliver joint activity through the Britain Tourism Strategy Board, British Marketing Board and six expert to expert ‘inter-boards’.

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Outputs in 2017/18 ranged from the development of a High Level Marketing Plan for 2017/18 which set out how the boards can work together to deliver sustainable growth, delivering an innovative and jointly funded influencer campaign “24 hours in Britain” and the inaugural MICE mission to China.

We also stepped up our engagement with our public diplomacy partners- the FCO, DIT, UKVI and British Council in London and overseas. We developed and implemented an engagement plan with three distinct aims:

Raising tourism’s profile and acting as one Her Majesty’s Government (HMG): Ensuring that the value

of tourism is understood and recognised and that VisitBritain acts as part of the Ambassador’s / High Commissioner’s team in our overseas markets;

Mutual Support: Extend our reach and impact through working with PDPs, while supporting their soft power

agenda.

Problem Solving: Collaborate strategically to build a shared agenda around common challenges and

opportunities.

Europe Key European partners, easyJet, Expedia and P&O, aligned to the regional and seasonal strategies of each of the Europe markets with focused activity around specific regions on the UK across the four quarters. In the case of our easyJet partnerships we were able to leverage the additional investment of Bristol and Newcastle Airports and the associated Destination Marketing Organisations (DMO). In the case of P&O we were able to extend the partnership to include a focus on Wales with investment from Visit Wales.

US A tripartite partnership was established with American Airlines and British Airways to promote Britain to the US millennial audience. VisitBritain acted as the catalyst for closer working between the two airlines as part of their business alliance and achieved a 2:1 partner to VisitBritain ratio of investment. VisitBritain, Marketing Manchester, and Manchester Airport invested equal amounts in gateway activity specific to the new direct Virgin Atlantic routes from Boston and San Francisco and were able to leverage match funding from Virgin Atlantic. VisitBritain, Birmingham Airport along with a collection of destinations including West Midlands Growth Company, Shakespeare’s England and Peak District combined funds and resources to leverage the new direct flight by low cost carrier Primera.

China VisitBritain negotiated a partnership with C-trip, China’s largest Online Travel Agency (OTA) and achieved significant added value through access to their channels. The deal was negotiated using our experience of working with Expedia across the rest of the world and through close collaboration between London based and market staff.

APMEA VB negotiated a commitment from Etihad to increase its partner investment for the next three years to £1 million per year, a particular achievement against a backdrop of significant political and financial challenges for ME carriers.

Food & Drink British food and drink became a key focus in China and the USA and in partnership with DEFRA and DiT we linked the tourism and export messages to reach a wider audience successfully aligning cross government funding and attracting commercial investment from British Airways.

DMC Partnerships VisitBritain initiated six strategic partnerships with Destination Management Companies (Abby Tour, JAC, Hotels&

More, E-Voyage, AC Tours and Angela Shanley) and were able to leverage their specific commercial relationship

with key resellers in target markets as well as their turnkey marketing and sales capability to get new DEF product

to market.

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6. Develop our role in the Business Visits and Events sector

Support major events bids

The Event Support Programme has provided support for six live bids in the last year with additional funding to five UK cities. The programme included an ‘internationalising event’ element which gave the opportunity for national events to develop through an international audience. The programme provided additional support to 11 diverse UK domestic events and helped them expand their international footprint.

With the new business events team in place there has been interaction with destinations on ad hoc support needs; one example is a request for UK Visas and Immigration information for an event London was bidding for to ensure a win: VisitBritain provided a solution and the event is now confirmed.

Developing new capacity for England

Through a Discover England Fund project, phase one of a ‘Capacity and Mapping’ exercise was completed. This has created a supply database of venues across 22 English destinations whose capacity is more than 400persons. The next phase will identify the occupancy of these venues and therefore the availability to sell space available to market.

Through destination and core cities meetings, opportunities have been identified to educate and share best practice to develop skills across destinations and win more business. Two key events were used to gain information and intelligence on what the industry needs from VisitBritain; Destinations Summit, attended by 22 destinations and 70 delegates and Academic Venues Conference, attended by over 40 venues and 75 delegates.

To support new capacity development, we also conducted two fairly extensive studies; one that focused on delegate spend and the other which addressed the barriers to doing business in the UK. These studies have been widely promoted and used by destinations.

Generating demand/creating connectivity for future business for Britain

In market activity has generated opportunities for destinations to engage with buyers in Paris, Geneva, Brussels, Washington DC, Boston, New York and Chicago. An event for 2019 has been secured from the Paris activity, which will generate an economic contribution in the region of £1.6 million. Opportunity continues to be realised from these events with Europe alone creating a platform to some 40 attendees with 56,000 event delegates and £64 million economic contribution.

VisitBritain, through VisitEngland, attended the key industry tradeshows; IMEX America, IMEX Frankfurt and IBTM World creating the opportunity for destination partners to meet with thousands of buyers.

Raising visibility is key in the meetings industry. VisitBritain through a comprehensive sponsorship agreement attended PCMA Convening Leaders, Nashville, where a SKIFT report on UK’s Intellectual Capitals and Creative Industries was presented to an American buyer audience. Association World Congress, Antwerp, gave VisitBritain the platform to talk about the many destinations on offer and to support destinations attending the event. ICCA (International Congress and Convention Association) Prague gave VisitBritain business events team an opportunity to meet, learn from and network with the global meetings industry to understand trends and new approaches to winning international events.

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7. Ensure that we manage our funds efficiently and comply with Government guidelines

Pension Scheme Changes In order to comply with Government requirements the BTA has been going through a process of reviewing and restructuring the staff pension scheme. The staff consultation process was completed at the end of 2017 and the BTA Board, DCMS and HM Treasury have approved that the existing defined benefit final salary staff pension scheme will be closed to future accrual once approval is given by both the Pension Trustees and VisitScotland, as the other employer in the scheme, to the deed of amendment. Discussions with all stakeholders is ongoing and we are hopeful agreement can be reached by mid-2019. It is intended that future pension provision for affected staff will be in the form of a defined contribution scheme. New starters already join a defined contribution scheme which has been in place since 1 April 2017.

National Quality Assessment Schemes The migration of the National Quality Assessment Schemes to the AA, the new licensee, has been successfully completed. VisitEngland continue to work closely with the AA to retain oversight over the schemes.

Project Management Approach Following setting up a Project Management Office (PMO) in 2017, a project governance structure is now in place together with a standard project process with supporting templates and tools. Projects now go through governance gateways and are prioritised as part of a portfolio rather than in isolation. PMO staff as well as others throughout the organisation have attended Agile project management training and projects are now being delivered using Agile methods. Key projects such as our office relocation and the implementation of a new intranet have been successfully delivered on time and budget using these new ways of working.

Information Technology/System Strategy Under the guidance of our new cross division IT governance board an IT/IS strategy for the BTA has been developed. It covers our key architecture principles and the three year roadmap of proposed activity. The governance board will prioritise project work in line with the roadmap and provide programme and project governance for the delivery of the roadmap.

8. Build the skills and capabilities of our staff and teams to deliver on our priorities

During the past year, there has been a fresh look at what skills are needed to enable our people to deliver their very best. This can be defined into four broad areas:

1. Personal effectiveness – time management, influencing and persuading, resilience, presentation

skills, recruitment training

2. Business-area skills: training in digital, content, Search Engine Optimization (SEO) and other tailored

skills

3. Project management: particularly in agile methodology

4. Management skills: having better conversations, performance management

We ran a number of training courses including pivotal conversations, managing stress, mental health first aid training, SEO, google analytics, job evaluation, presentation, influencing skills, performance review training, having difficult conversations, storytelling, agile project management and leadership.

We have developed and are implementing in 2018 a new performance management system, and have commenced the review of policies and processes, to optimise clarity and costs.

We have created a new compliance training approach via an e-learning environment, enabling staff to access training worldwide. Induction and onboarding has been refreshed. We are currently tendering for a new HR system, which will be available on mobile devices, enabling access on the move and across the globe, which will improve process productivity.

27



2. THE ACCOUNTABILITY REPORT

CORPORATE GOVERNANCE

The Director’s Report for the Year 2017/18

Scope of responsibilities

The British Tourist Authority (BTA) was established by the Development of Tourism Act 1969. It undertakes Britain-wide and England-specific activity respectively under the brands “VisitBritain” and “VisitEngland” in

accordance with the governance structure established as a result of the 2015 Spending Review.

VisitBritain and VisitEngland were brought structurally closer together in 2015. Therefore, we have consolidated the accountability for delivery of England and Britain into the remit of a single body under the BTA.

The BTA Board receives advice on English tourism matters from the English Tourist Board (also known as the VisitEngland Advisory Board). This is the advisory board responsible for advising the Executive and Board of the BTA on the development and implementation of the England Action Plan and provides continued guidance and advice on how best to deliver England activity through the England Action Plan. The VisitEngland Advisory Board monitors delivery and advises the BTA Board on the progress of the Plan’s implementation.

In relation to the Discover England Fund, the VisitEngland Advisory Board advised on the preparation of criteria for assessing bids and its comments and advice were communicated to the BTA Board to inform the BTA Board’s decisions.

Given its advisory function, the VisitEngland Advisory Board continues to convene board meetings, no less than four times a year with additional meetings where appropriate.

VisitEngland is legally accountable to the BTA Board and Accounting Officer of BTA who exercise their responsibilities through a Memorandum of Understanding with ETB which details the corporate governance arrangements.

ETB does not receive any income directly from the Exchequer or from any other source. All costs and expenses incurred by VisitEngland connected to ETB’s work are met from BTA’s resources. The Secretary of State for Digital, Culture, Media and Sport has issued Accounts Directions to the BTA which include the requirement for the BTA to disclose all expenditure made on behalf of the ETB.

British Tourist Authority(BTA) English Tourist Board (ETB,

also known as ‘VisitEngland’, then as VisitEngland

Advisory Board) Accounting Officer BTA/

Chief Executive ‘VisitBritain’

British Tourist Authoritytrading as

‘VisitBritain’ (VB)

British Tourist Authoritytrading as

‘VisitEngland’ (VE)

28



The Directors’ Report for the Year 2017/18 (Continued)

Organisation

British Tourist Authority (BTA)

The BTA Board comprises the Chairman, Steve Ridgway CBE, and seven other members, six of whom are

appointed by the Secretary of State for Digital, Culture, Media and Sport and one by the Welsh Assembly. The

Chairman of ETB and of VisitScotland sit on the Board in an ex-officio capacity. In addition, during the year, Katy

Best and Kevin Murphy attended Board meetings by invitation as observers in their capacity as members of the

boards of the Northern Ireland Tourist Board and London & Partners. Giles Smith and Stephen Darke also

attended the Board meetings as Observers in capacity as DCMS representatives and Hazel Cunningham as

Executive Director for BTA.

The Department for Digital, Culture, Media and Sport appointed new Chairs for the BTA Board and the

VisitEngland Advisory Board, Steve Ridgway CBE succeeded Christopher Rodrigues CBE as BTA Chairman and

Denis Wormwell succeeded Penelope, Viscountess Cobham CBE as Chairman of the VisitEngland Advisory

Board. The new appointments commenced as Chairmen on 1 April 2017 for a term of three years, however, both

Chairmen had previously sat as members of the respective Boards.

Three sub-committees report to the Board; the VisitEngland Advisory Board, the Audit Committee and the

Remuneration Committee. Members of both Committees during the year are identified below.

Chief Executive Officer: Sally Balcombe*

British Tourist Authority Board Members Appointed Appointment Expires

Stephen Ridgway CBE (Chairman)* 11-Jul-13 31-Mar-20

Lord John Thurso** 01-Apr-16 31-Mar-19

Denis Wormwell* ** *** 01-Apr-17 31-Mar-20

Margaret Llewellyn OBE** 01-Nov-15 26-Jan-18

John Lindquist*** 15-Mar-10 14-Sep-19

Ian McCaig* 13-Feb-14 12-Feb-19

Dame Judith Macgregor 01-Dec-17 30-Nov-20

Angela Bray 01-Jan-16 31-Dec-18

British Tourist Authority Board Observers Position, Organisation

Board Member, Northern Ireland Tourist Board and Commercial Katy Best

Director, Belfast City Airport

Giles Smith DCMS (Observer until December 2017)

Stephen Darke DCMS (Observer from January 2018)

Kevin Murphy Board Member, London & Partners (Observer until December 2017)

Hazel Cunningham Executive Director, Finance and Business Services, BTA

* Members of the British Tourist Authority’s Remuneration Committee

Rt. Hon. Viscount Thurso and Denis Wormwell sit on the Board in an ex-officio capacity in their roles as Chairman of **

VisitScotland and VisitEngland respectively. Margaret Llewellyn was appointed by the Welsh Assembly.

*** Members of the British Tourist Authority's Audit Committee

29



The Directors’ Report for the Year 2017/18 (Continued)

English Tourist Board (ETB, also known as VisitEngland Advisory Board)

The ETB Board comprises the Chairman and five other members, all of whom are appointed by the Secretary of

State for Digital, Culture, Media and Sport. In addition one observer attends the Board meetings by invitation.

Appointment English Tourist Board Members Appointed Expires

Denis Wormwell (Chairman)* ** 22-Jun-09 31-Mar-20

Nigel Halkes* 13-Jan-14 12-Jan-22

John Hoy 30-May-11 29-May-19

Sarah Stewart OBE 30-May-11 29-May-19

05-Mar-18 04-Mar-22Allan Lambert

05-Mar-18 04-Mar-22Fiona Pollard

English Tourist Board Observers Position, Organisation

Suzanne Bond Former Chief Executive, Cornwall Development Agency

Stephen Darke DCMS


*Members of the British Tourist Authority’s Audit Committee **Members of the British Tourist Authority's Remuneration Committee

Sally Balcombe attends VisitEngland Advisory Board meetings in her capacity as BTA Accounting Officer/Chief

Executive Officer, BTA

BTA and ETB both maintain Registers of Board Members’ Interests. Copies of these Registers can be obtained from the Secretary to the Boards.

The biographies of the Members of both Boards are available on our corporate website:

https://www.visitbritain.org/our-team

Audit arrangements

The audit of the British Tourist Authority’s financial statements by the National Audit Office (NAO) enables the Comptroller and Auditor General to fulfil his statutory duty under the Development of Tourism Act 1969, to lay

before Parliament certified copies of the annual accounts and his report.

The fees paid to the NAO for audit services amount to £61,000 (2016/17: £49,500), and there are no other services

provided by the NAO.

So far as the Accounting Officer is aware, there is no relevant audit information of which the BTA auditors are

unaware. She has taken all necessary steps to make herself aware of any relevant audit information and to

establish that the BTA’s auditors are aware of that information.

Sally Balcombe

Accounting Officer BTA

13 May 2019

30

https://www.visitbritain.org/our-team



Statement of Corporate Governance by the Accounting Officer

Scope of Responsibility

The British Tourist Authority responsibilities under the Act and its wider governance arrangements are explained

in detail in the Directors’ Report page 28. BTA is sponsored, and part funded, by the Department for Digital,

Culture, Media, and Sport which has been confirmed through the funding letter of the 3 March 2016 for the financial

year 2017/18.

BTA is committed to high standards of governance and ethical behaviour and adopts systems and implementation

arrangements which are appropriate for its business.

The Governance Framework

The Chairman of the BTA is accountable to the Secretary of State for Digital, Culture, Media and Sport for the

performance of the BTA in its Britain and England activities.

The BTA Board is responsible for ensuring that VisitBritain and VisitEngland operate within the terms of the

Development of Tourism Act 1969 and for overseeing the delivery of planned results. In carrying out its

responsibilities in relation to VisitEngland, the BTA Board is advised by the Advisory Board of ETB which I attend

in my capacity as BTA Accounting Officer/Chief Executive Officer.

The roles of the BTA Chairman and BTA Board are set out in full in BTA’s Code of Practice for Board Members and the Management Agreement with DCMS. In broad terms, the BTA Board is responsible for:

Maintaining accountability for delivery of all activity on British and English tourism;

Maintaining both VisitBritain and VisitEngland brands;

Establishing the overall strategic direction of VisitBritain and VisitEngland and subsequently monitoring

performance against the targets set out in the Business Plans, Management Agreement or which are

attached to any other sources of Government funding;

Consulting with the VisitEngland Advisory Board as appropriate for advice on English tourism matters

(but not delegating final decision making to the VisitEngland Advisory Board);

Ensuring that it fulfils its role under the Development of Tourism Act 1969 and meets the aims and

objectives established by the Secretary of State for Digital, Culture, Media and Sport as set out in the

Management Agreement;

Ensuring it takes account of any guidance received from DCMS in reaching its decisions; and complies

with statutory and administrative requirements for the use of public funds;

Ensuring that high standards of corporate governance are observed at all times.

The BTA Board is supported by the work of the Audit and Remuneration Committees which is discussed below.

We started 2017/18 with new Governance arrangements and during the year the Board has delivered to its

responsibilities to DCMS and supported me as the Accounting Officer. However, in consultation with the BTA

chairman, we felt that there were opportunities to improve the overall effectiveness of the Board and its

Committees.

As Accounting Officer, I have responsibility for accounting to Parliament, DCMS, the BTA’s Board and other stakeholders. I am personally responsible for safeguarding the public funds for which I am in charge; for ensuring

propriety and regularity in the handling of those public funds; and, reporting to the Board of the BTA, for the day-

to-day operations and management of the BTA and the achievement of its strategic aims. In addition, I ensure

that the BTA as a whole is run on the basis of the standards, in terms of governance, decision-making and financial

management that are set out in HM Treasury’s “Managing Public Money”.

31



Statement of Corporate Governance by the Accounting Officer (Continued)

As Accounting Officer, I am responsible for the day-to-day operations and management of BTA and remain

accountable to the Department for Digital, Culture, Media and Sport and to Parliament for the income and

expenditure of all BTA work carried out under the VisitBritain and VisitEngland brands.

I am supported by a team of operational Executive Directors, including the Director of Finance & Business

Services who has responsibility for financial and compliance matters, and the Secretary to the Boards who

supports both Boards and is a member of the Executive Team.

Well-developed information and reporting systems are in place to assist in monitoring progress against financial

and non-financial targets and to provide access to detailed management and transactional information.

Accountability, limits of authority and lines of reporting are clearly defined and employees in VisitBritain and

VisitEngland teams, including myself, have annual performance targets which are linked to the BTA Business

Plan.

Compliance with HM Treasury and Cabinet Office’s Code of Good Practice 2017

BTA complies with HM Treasury and Cabinet Office’s Code of Good Practice 2017 in relation to Corporate

Governance to the extent that it is relevant and appropriate to BTA. However, as BTA is a mature organisation,

with a mature control environment and governance and risk management arrangements in place, Mazars, the

internal auditors, have not been invited to attend any Board meetings during the year, however, they attend all

Audit Committee meetings.

The Effectiveness of the Governance Framework

As Accounting Officer I have responsibility for reviewing the effectiveness of BTA’s corporate governance

arrangements. In carrying out this duty I am advised and supported by the BTA Board, the ETB (VisitEngland)

Advisory Board, and the Audit Committee, the internal and external auditors as well as by the Executive Directors

and Secretary to the Boards.

BTA has well embedded governance policies and procedures in place which are subject to regular testing and

review. An annual programme of internal audit work is agreed with the Audit Committee on those areas which are

known to be of higher risk or which may be of an innovative nature or where it is appropriate to carry out a review

of existing systems.

We also introduce new systems of internal control as necessary to meet the changing needs of our business and

the risks to which the organisation is exposed.

We also operate within other Government Governance Frameworks, such as the communications spend controls

(Cross Government Professional Assurance), which scrutinises and agrees planned marketing and advertising

expenditure to ensure value for the taxpayer and complies with Government policy and legislation. Activity and

expenditure in respect of GREAT funding is scrutinised by the GREAT Programme Board.

The Discover England Fund is implemented by an established governance model, this includes a comprehensive

programme board for assessment and decision making followed by an independent awards panel. This process

enables the BTA Board to make informed decisions when approving bids.

32




The BTA (VisitBritain and VisitEngland) Management accounts are produced on a monthly basis and available

for all budget holders to monitor their budget. The Executive Directors review the Management Accounts and

performance report quarterly to check performances are on target against planned results. BTA Board review the

latest Management Accounts at each of their meetings, as does the Audit Committee. We also meet with and

report to our Government Sponsor Department throughout the year, in compliance with our Management

Agreement. In particular we conduct a quarterly review process with DCMS officers through which we highlight

performance achievements against targets as well as risks and respective mitigation strategies.

Board Governance

The composition and membership of the BTA Board is reported below. I attend every meeting as does the Director

of Finance & Business Services.

The recruitment and appointment process for those Board Members appointed by the Secretary of State for

Digital, Culture, Media and Sport is carried out in accordance with the Office of the Commissioner of Public

Appointments’ Code of Practice, and takes full account of the Chairman and Board’s assessment of any gaps in

the skills and competencies required to ensure a well-rounded Board equipped to carry out its responsibilities for

BTA. Board Members are normally appointed for their ability to add to the Board’s collective wisdom.

Appointments or re-appointments are normally for periods ranging from a minimum of 3 years to a maximum of

5. The maximum term any BTA Board member can serve continuously is 10 years.

The Chairman ensures that all Members of the BTA Board, when taking up office, are fully briefed on the terms

of their appointment and on their duties and responsibilities.

All new Board Members receive a comprehensive induction pack, which includes copies of all relevant governance

material, and attend an induction session with the Chief Executive Officer and Directors.

The BTA Board normally meets at least six times during each calendar year. BTA Board Members receive timely,

regular and appropriate management and other information to enable them to fulfil their duties. They also have

direct access to the advice and services of the Secretary to the BTA Board and have regular informal contact

between meetings with the Chairman, Chief Executive, and Senior Management Team as appropriate; particularly

in relation to any discrete areas of activity which individual Members sponsor. This helps to foster an open

relationship and regular exchange of knowledge and experience between the Management Team and Board

Members.

BTA Board Meetings held between April 2017 and March 2018 took place on following dates:

1. 3 May 2017

2. 20 June 2017

3. 27 June 2017 (Extraordinary Board meeting)

4. 28 September 2017

5. 5 December 2017

6. 25 January 2018

7. 20 March 2018

33

Board Member / Observer /

Independent Secondee

Board

Meetings

Attended

Audit

Committee

Meetings

Attended

Remuneration

Committee

Meetings

Attended

Steve Ridgway CBE Chairman of the Board and

Remuneration Committee 7 (7) 1 (1)

Board Member and member of the

Denis Wormwell Audit and Remuneration 7 (7) 4(4) 1 (1)

Committees

Chief Executive Officer and

Sally Balcombe attendee to the Remuneration and 7 (7) 4(4) 1 (1)

Audit Committees

Katy Best Observer 6 (7)

Giles Smith* DCMS 3 (5)

Angie Bray Board Member 7 (7)

Hazel Cunningham Executive Director, Finance and

Business Services, BTA 7 (7) 4(4)

Hugh Green Independent Member of the Audit

Committee 4(4)

Nigel Halkes Member of the Audit Committee

(VEAB Member) 3(4)

John Lindquist Board Member and Chairman of

the Audit Committee 7 (7) 4(4)

Margaret Llewellyn

OBE*** Board Member 6 (6)

Ian McCaig Board Member and member of the

Remuneration Committee 7 (7) 1 (1)

Kevin Murphy**** Observer 5 (6)

Stephen Darke** DCMS 2 (2)

Rt. Hon. Viscount

Thurso Board Member 6 (7)

Dame Judith

Macgregor Board Member 3 (3)




The attendance by individual Board Members, Observers and Committee Members at meetings during 2017/18

was as follows:

* During period April 2017 - March 2018, Giles Smith attended 3 Board meetings in May, September and

October 2017 for DCMS prior to stepping down.

** Stephen Darke attended 2 Board meetings in January and March 2018, for DCMS following the stepping

down of Giles Smith.

*** Margaret Llewellyn attended 6 Board Meetings in May, June, September, October, December 2017 and

January 2018 in her capacity as Chair of the Wales Tourism Advisory Board, which has ceased to exist.

****Kevin Murphy attended 5 meetings in May, June, September, October and December 2017 before stepping

down as Board Member from London & Partners.

34




Arrangements are in place through which potential conflicts of interests are recorded and managed. The purpose

of these arrangements is to avoid any danger of Board Members being influenced, or appearing to be influenced,

by their private or other interests in the exercise of their public duties for BTA.

The register of Board Members’ interests is available on request from the Secretary to the Board. Employees are

also asked to declare potential conflicts of interest and a separate register is maintained to record these. In

addition, at all Board and Committee meetings Members are required to declare an interest if they or their close

family have an interest, financial or otherwise, in any matter being considered at the meeting. The Board or

Committee will then decide whether or not it is appropriate for the Member to participate in the discussion on the

item in question. In 2017/18 there were no withdrawals from Board or Committee discussions.

The BTA is committed to providing a fair and open culture and has a Whistleblowing policy in place documenting

the procedures to allow employees to raise any issues, freely and without concern, with their Line Manager. The

policy is available to all staff via the corporate intranet. The policy explains how employees or others may make

a disclosure or “blow the whistle” on any element of the organisation’s activity, which they perceive is contrary to its’ policies and the Standards of Conduct Policy, and falls within the category of malpractice.

Our Sponsor Department DCMS received a whistleblowing complaint from a VisitBritain employee last year. The whistleblowing complaint was handled under the DCMS Whistleblowing and Raising a Concern Procedure, VisitBritain was not involved with the whistleblowing process. We received confirmation from DCMS in December 2018 that the whistleblowing complaint had been closed since the matters raised form part of an ongoing programme of work that DCMS was undertaking, including audits of VisitBritain by The Government Internal Audit Agency (GIAA) and DCMS HR.

The Work of the Board in 2017/18

During 2017/18 the Board reviewed progress against the agreed corporate priorities and also considered a

number of key programmes and change management initiatives, these included:

Continued to market Britain overseas to drive growth in international leisure and business tourism.

Maintained distinct activities to develop and market English tourism.

Developed the I Travel For campaign strategy.

Continued to review the options for the current pension arrangements to ensure future compliance with HM Treasury requirements for public sector pension reform.

Continued to build the commercial partnership strategy.

Continued to manage the Discover England Fund.

The Quality of Data used by the Board

The data and information used by the Board include assessments and statistics relating to both industry

performance and BTA’s financial performance and progress in meeting its corporate targets and performance

measures; reports on the progress of major programme activities, reviews of the competitive landscape and

reports from VisitEngland.

Industry performance is assessed using data from independent third party sources such as the ONS

International Passenger Survey and insights and market intelligence gathered on territory by our managers.

Relevant data is presented to the Board at each meeting.

Financial Data is provided by our Financial Information System from which the management accounts and

comparisons to budget are produced. These, together with commentary, are provided to the Audit

Committee and Board at each meeting. The performance for the financial year is also monitored monthly

and reported to the Board.

A range of Human Resources data and metrics are reported on a quarterly basis. The Remuneration

Committee also commissioned and considered, on behalf of the Board, payroll benchmarking data.

35




Non-financial performance reports, including separate reports on our retail activity, enable the Board to

monitor progress against corporate and business plan targets. These include measures of campaign

performance and PR reach and effectiveness. Evaluation is based on tourism industry standards for

campaign performance, compiled by internal experts. Measures also exist for digital, including social media,

and marketing in-kind.

Progress reports on major areas of programme activity and reviews of the competitive landscape and the

issues which impact on Britain’s performance as a global destination in each of the territories in which

VisitBritain operates are presented to the Board on a regular basis.

Reports on VisitEngland’s financial and non-financial performance are presented quarterly to allow the

Board to track progress on business plan objectives and budgetary compliance.

The Board considers the standard of this data and information in terms of quality, accuracy and timeliness commensurate with its responsibilities but if it considers it necessary, requests additional information or clarification.

The Board’s understanding and scrutiny of the quality of data are also informed by the work of the Audit Committee and that of the internal and external Auditors.

BTA Board Committees

BTA does not have Nominations or Governance Committees. The Remuneration Committee does the work of a

Nominations Committee to the extent applicable and the Audit Committee reviews and considers any governance

matters referred to it by the Board.

VisitEngland Board

During 2017/18 the VisitEngland Board reviewed progress against VisitEngland’s agreed corporate priorities and considered a number of key programmes and change management initiatives, including the following:

Oversight of Discover England Fund awards, ensuring the development of English tourism products launched in market.

Maintain distinct activities to develop and market English tourism. Consumer campaigns and digital content delivered. Continued to developed Business Events strategy for England.

Maintained Strategic partnerships.

The Remuneration Committee

The Remuneration Committee, which had a vacancy during 2017/18, consists of four members: the Chairmen of

BTA and ETB and two other members of the Boards of BTA and ETB. The Chief Executive Officer, Director of

Finance & Business Services and the Head of People and Talent attend meetings as required but no member of

staff, including the Chief Executive, is present when their remuneration is being discussed.

In common with other government departments and agencies, BTA must operate within public sector pay policy

guidelines, further details of which are given in the Remuneration Report. However, the Committee reviews the

pay remit prior to its submission to DCMS and, subsequently, reviews the final consolidated and non-consolidated

payment ranges to be awarded to staff which are both based on performance during the year.

36




The Audit Committee

The Audit Committee meets at least four times a year and its remit reflects the good practice principles for Audit

and Risk Assurance Committees in central government as set out in HM Treasury’s Audit and Risk Assurance Committee Handbook (April 2016).

The Committee consists of four members: three are drawn from the Boards of BTA and ETB and the fourth is an

external member who is a Partner at KPMG LLP. I also attend meetings together with the Director of Finance &

Business Services and the Secretary to the Board. The Internal and External Auditors are also invited to attend

meetings, in particular to discuss the results of internal audit activity and the annual audit respectively. During the

year, the Committee Chairman met privately with the internal auditors, Mazars.

An annual programme of internal audit work is agreed with the Audit Committee on those areas which are

considered to be of higher risk or which may be of an innovative nature or where it is appropriate to carry out a

review of existing systems. The Committee reviews this programme during the year to re-allocate resources to

areas of risk which come to its attention.

During the year, the Audit Committee has continued to scrutinise the internal controls and risk management. Key

areas of review this year have included:

Follow-up reviews on key areas from the previous plan, including procurement policies and procedures, retail operations

Workforce Development and Human Resources operations Overseas Offices financial operations Discover England Fund; operation and fund management General Data Protection Regulations preparedness and accordingly revisions to data management

policies

Following a Government internal audit framework competitive process, Mazars were appointed as auditors running through to 31 March 2020.

The Internal Audit Annual Report for the year ended 31 March 2018 produced by Mazars states:

On the basis of our audit work, we consider that the British Tourist Authority’s governance, risk management and internal control arrangements are generally adequate and effective, with the exception of HR – Workforce Development. Certain weaknesses and exceptions were highlighted by our audit work, specifically a ‘Limited’ assurance awarded in HR – Workforce Development. These matters have been discussed with management, to whom we have made a number of recommendations. All of these have been, or are in the process of being addressed, as detailed in our individual reports.

Executive

The Board appoints and employs the Chief Executive, who leads an Executive Director team. The Executive team

are responsible for the management and performance of the organisation and the delivery of the strategy on

behalf of the Board under the Financial Control Framework and procedures approved by the Board. Executive

appointments are filled through open recruitment. Executive Directors who served during 2017/18 are listed on

page 44.

37




Overall Control Environment

The Audit Committee has:

Reviewed all Internal Audit reports and management responses and monitors progress on the implementation of any agreed recommendations;

Followed an annual work programme; Reviewed the corporate risk registers to satisfy itself that risks are being well managed and that all new emerging risks have been identified;

Reviewed the Annual Report and Accounts prior to submission to the Board and any matters arising from

the audit of the Accounts by the National Audit Office.

BTA has suffered no protected personal data incidents during 2017/18 and has therefore made no report to the

Information Commissioners office.

We have not received any Ministerial Directions during the year.

The Chairman of the Audit Committee, in his annual report to the Board, advised that without giving specific assurance

on the effectiveness of the whole system, the Audit Committee is satisfied that the internal control environment

appears to be well supported by the various embedded mechanisms and working practices.


Key Governance Issues

In 2017/18 the Audit Committee considered and agreed a number of recommendations from the NAO and Mazars.

Key areas of consideration and assurance included:

Compliance with policies, procedures and regulations has been an area of focus this year; ensuring awareness and

understanding across all our global operations. In response to reviews conducted, including those in conjunction with

DCMS, which covered aspects of procurement, funds management and HR, we have strengthened a number of

procedures across these areas and commenced the development of compliance training some of which will be

delivered via a new e-platform. The platform will facilitate the monitoring of take up of training across teams and staff

understanding, thus enabling us to target additional training, support or other necessary, management planning.

The Audit Committee has also endorsed a new governance process which commence this year; requiring each

of the Executive Directors to complete an Annual Assurance Statement to the Accounting Officer in respect of

their delegated responsibilities across functional and portfolio areas.

The Audit Committee has discussed in detail the HR workforce development audit, recommendations made by

the Internal Audit team and management responses. This review highlighted procedural weaknesses that touched

on other areas.

As highlighted in the Head of Internal Audit report, “All of these have been, or are in the process of being addressed, as detailed in our individual report.” The Audit Committee has endorsed the action plan which is now well in progress.

During the annual audit conducted by the National Audit Office (NAO), it was highlighted that four staff severance

payments were not appropriately approved in accordance with the governance requirements as set out in

Managing Public Money; Our internal control process relies on manual intervention to ensure that anomalies

involving severance payments are identified and duly presented for approval with the DCMS prior to settlement.

It is clear that there was a weakness in this control process due to poor staff skills and knowledge in the

interpretation of the procedure required and the lack of a final authorisation stage. In each of the identified cases,

the circumstances varied:

38




One case was subject to a legal mediation process, which due to its unique nature and timing, did not follow the

standard approval process. Approval was requested retrospectively following conclusion of the mediation process;

The next two cases were initially submitted to DCMS for information rather than approval. They related to two

severance payments in the US office. Given that these cases were identified as a potential litigation risk, they

were referred to external US counsel for consideration. Counsel’s advice was that the payment had become contractual due to custom and practice. Given this advice we mistakenly notified rather than sought approval.

Once this had been clarified, retrospective approval was immediately secured.

The fourth instance resulted from an exit payment following a redundancy of an employee. The exit payment

which included payment in lieu of notice was inadvertently judged not to be subject to employees’ tax and NIC. Once discovered the related tax obligation was notified to HMRC and reported accordingly, but due to the agreed

terms of the exit payment for the redundancy the BTA was unable to recover the amount from the past employee.

In respect of the latter case, the BTA has not secured retrospective approval from DCMS and HM Treasury.

While these payments are not material in value and individually have a valid business case, I understand the

need to comply with processes for approval and the requirements for of Managing Public Money. It is

acknowledged that the failure to secure retrospective approval in respect of the fourth matter has caused the

Comptroller and Auditor General to qualify his regulatory audit opinion on BTA’s accounts for 2017/18 in respect

of this matter as set out in pages 58-63.

I have considered issues highlighted by the various audit reviews, and taken action to ensure an improvement

plan in place and implemented to improve procedures and controls, which is now well in progress. The plan

includes but is not limited to the following:

Widened the Remuneration Committee Remit to oversee the improvement plan;

We have invested in the Human Resources team; both restructuring and upskilling the team;

Reviewed a number of HR policies, which have been revised and consulted on

Reviewed and implemented enhanced controls for all HR processes including exit payments

Reviewed and implemented a strengthened performance management framework

Strengthened Staff Probation Management

Increase HR support to staff on-boarding and off-boarding

Launched New Values Framework

Increased Training & Development over a range of themes such as management, culture and

diversity, finance, procurement and compliance with Government requirements

Launched a well-being programme

Procured and commenced implementation of new HR Information System.

I recognise culture is key to the effectiveness of our compliance framework; embedding this culture change is

already underway at senior executive team; partly through the assurance statements and going forward through

greater clarity and visibility of objective setting.

I also recognise the culture of compliance must be understood and demonstrated by our Board and Committees

and will ensure appropriate training particularly as we recruit to Board vacancies, as well as demonstrable

discussion and oversight.

39




We continue to monitor our use of and compliance with the Light Touch Regime in respect of Partnership working.

The need to identify appropriate solutions to enable us to work with our potential partners, even when they are

contractually tied to their own agencies, is becoming increasingly critical to secure match-funding, access to

resources and consumer insights information and ultimately leverage optimum use of public resources in order to

make greater impact, in increasingly competitive overseas markets, to meet Government targets.

The Discover England Fund is a new strategy objective with a value of £40m over a 3-year period and

consequently we have made our project management and grant-giving regime a priority to ensure policies and

procedures reflect good practice and the appropriate application of public sector controls. Consideration for

investment this year in strategic and national challenges has been a focus of attention. In particular, the potential

for national level technological investment to support a range of bids to the Fund and future projects has been

tested through a pilot which has been scrutinised through BTA Governance, DCMS Investment Committee as

well as Government Digital Service.

In preparation for the introduction of GDPR legislation the BTA set up a working group made up of

representatives for each of our data processing systems plus legal and technical subject matter experts. Major

GDPR work included:

Identifying and mapping the flow of personal data within and between VisitBritain/VisitEngland

systems

Creating a raft of new and updated policies relating to GDPR

Modifying the content and layout of our B2C and B2B data capture forms

Implementing new back up arrangements

Training and data cleaning activity

Confirming with suppliers that they are operating within the new law

Other areas of focus this year have included; IT security, cyber fraud and attacks and pension liabilities & risks.

I am grateful to the Audit Committee and DCMS for their support

Sally Balcombe

Accounting Officer

BTA

13 May 2019

40



REMUNERATION AND STAFF REPORT

Remuneration Report

Remuneration Report Policy for Staff

Under the terms of the Development of Tourism Act 1969 and the Management Agreement issued by DCMS, the

conditions of service that BTA offers to its staff, and its pay award scheme, must be approved by the DCMS.

DCMS must, in turn, obtain HM Treasury approval before agreeing the pay award framework each year. The

arrangements for the Chief Executives of VisitBritain and VisitEngland are slightly different but the same principles

apply.

During the year BTA implemented pay increases, in line with DCMS guidelines, limited to 1% of the annual

consolidated salary bill and one-off non-consolidated annual performance bonus payments limited to the same

percentage (2.66%) of the annual salary bill as for the previous three years. The payment of both consolidated

pay (pensionable) and non-consolidated bonus payments (non-pensionable) is performance related and depends

on the outcome of annual performance review of objectives and competencies and on staff being in post on 1

August 2017. The maximum consolidated payment made was 1.75% of basic pay and the maximum non-

consolidated payments was 5.75%. Payments to Directors were made in line with the arrangements for all staff.

Remuneration of Boards

The Board Members of BTA and ETB have had their salaries frozen for five years with effect from 1 April 2010.

The new Chairman was appointed on a lower rate, in accordance with the thresholds set by DCMS. New board

members have also been appointed on the same principles.

41



Remuneration Report (Continued)

The information in pages 42 - 48 falls within the scope of the Comptroller and Auditor General’s audit opinion on the accounts and is audited.

BTA Board members’ remuneration:

Remuneration Remuneration 2017/18 2016/17

£ £ Christopher Rodrigues CBE (Chairman to 31st March 2017)

- 49,090

Penelope, Viscountess Cobham, CBE* - -

Stephen Ridgway CBE (Chairman from 1st April 2017) 40,000 9,435

Lord John Thurso* - -

Denis Wormwell* - -

Margaret Llewellyn OBE* - -

John Lindquist 9,435 9,435

Ian McCaig 9,435 9,435

Dame Judith Macgregor 2,560 -

Angela Bray 9,435 9,435

70,865 86,830

Pensions to former Chairmen 15,268 16,805

Total remuneration 86,133 103,635

British Tourist Authority Board Position, Organisation

Observers** Board Member, Northern Ireland Tourist Board and Katy Best Commercial Director, Belfast City Airport

Giles Smith DCMS (Observer until December 2017) Board Member, London & Partners (Observer until December

Kevin Murphy 2017)

Stephen Darke DCMS (Observer from January 2018) Hazel Cunningham Executive Director, Finance and Business Services, BTA

Board Members’ remuneration is stated per annum / 12 month period. Where a Member’s term of office

commences or expires during the year they receive a pro-rata payment.

* Margaret Llewellyn, Rt. Hon. Viscount Thurso and Denis Wormwell sit on the Board in an ex-officio capacity in

their roles as Chairmen of Visit Wales, VisitScotland and VisitEngland respectively, and do not receive any

remuneration from VisitBritain. Penelope, Viscountess Cobham’s role as Chairman of VisitEngland ended on 31st March 2017.

** Observers receive no remuneration but Hazel Cunningham was remunerated by VisitBritain as Director of

Finance and Business Services of VisitBritain.

Stephen Ridgway took over the position of Chairman from Christopher Rodrigues on 1st April 2017.

Jason Thomas, The Director for Wales, attended one meeting in 2017/18 and received no remuneration.

42




VisitEngland Board members’ remuneration:

Remuneration Remuneration 2017/18 2016/17

£ £

Penelope, Viscountess Cobham CBE (Chairman until 31st March 2017)

- 45,210

Denis Wormwell (Chairman from 1st April 2017) 16,560 9,435

Nigel Halkes 9,435 9,435

John Hoy 9,435 9,435

Sarah Stewart OBE 9,435 9,435

Allan Lambert - -

Fiona Pollard 275 -

Total remuneration 45,140 82,950

English Tourist Board Observers* Position, Organisation

Suzanne Bond Former Chief Executive, Cornwall Development Agency

Stephen Darke DCMS


Board Members’ remuneration is per annum / 12 month period. Where a Member’s term of office commences or

expires during the year they receive a pro-rata payment.

* Observers receive no remuneration but Hazel Cunningham as Director of Finance and Business Services of

VisitBritain.

Remuneration of CEO’s and Directors

Remuneration of CEOs The basis of the Chief Executive Remuneration packages is set out in the contract of employment and stipulates

that they are eligible to be considered for an annual performance bonus of up to 12.3% for the current VisitBritain’s CEO subject to the approval of the Remuneration Committee. In each case, the Remuneration Committee

approved the Chairman’s recommendation to award the Chief Executive the maximum bonus payable in

recognition of her outstanding performance during the performance year under review. The bonus was non-

consolidated and a consolidated increase of 7% was also awarded.

Remuneration of Directors Each Director is set personal objectives linked to the Business Plan which are assessed at the end of the business

year taking into account the results achieved. Assessments are used to determine increases to base pay and

annual performance bonus payments. Bonus payments are based on performance levels attained and are made

as part of the appraisal process. The maximum bonus payment for the Directors was 12.5%. All payments are

based entirely on performance, no discretion was exercised. Payments were approved by the Remuneration

Committee.

The bonuses reported in 2017/18 relate to performance in 2016/17 and the comparative bonuses reported for

2016/17 relate to performance in 2015/16.

43




The information below relates to the Accounting Officer/Chief Executive of VisitBritain, and the Senior Executives of VisitBritain and VisitEngland.

2017-18

Name

Salary &

Allow ances

(£’000)1

Bonus Payments

(£'000)

Accrued pension

benefits during the

year (£'000)

Total

Remuneration

Figure (£'000)

Employer pension

contributions

(£'000)

Real Increase in

pension at

Retirement Age

(£'000)

Total accrued

pension at

Retirement Age as

at 31.03.2018

(£'000)

Cash equivalent

transfer value as

at 31.03.2017

(£'000)

Cash equivalent

transfer value as

at 31.03.2018

(£'000)

Real increase

cash equivalent

transfer value

(£'000)2

Sally Balcombe (Accounting Officer BTA/CEO VB)⁴ 165-170 15-20 43 225-230 20-25 0-2.5 5-10 166 234 56

Hazel Cunningham (Director, Business Services)⁴ 120-125 10-15 34 165-170 15-20 0-2.5 5-10 85 130 37

Patricia Yates (Director, Strategy and Communications)⁴ 115-120 10-15 25 150-155 25-30 0-2.5 25-30 809 816 -23

Robin Johnson (Director, Europe)4 105-110 10-15 26 145-150 25-30 0-2.5 20-25 412 474 45

Carol Dray (Director Commercial) 4 120-125 15-20 34 170-175 15-20 0-2.5 0-5 55 106 44

Clare Mullin (Director, Britain Marketing)4 110-115 0-5 39 150-155 15-20 0-2.5 0-5 7 47 38

Sumathi Ramanathan (Director, APMEA Region)3 4 7 155-160 0 0 155-160 0 0 0 0 0 0

Paul Gauger (Interim Director, Americas)4 6 105-110 5-10 11 125-130 10-15 0-2.5 5-10 174 200 18

Andrew Stokes (Director, England) 4 110-115 5-10 32 150-155 10-15 0-2.5 0-5 46 89 38

Gavin Landry (Director, Americas)5 8 70-75 0 0 70-75 0 0 0 0 0 0

Trisha Warw ick (Director, APMEA Region)5 115-120 0 0 115-120 0 0 0 0 0 0

¹ No benefit in kind w as paid in 2017-18

2 The real increase in cash equiv alent takes into account an assumed rate of rev aluation of 3%, in line w ith the Gov ernment's statutory rev aluation order for 2017/8

3 Sumathi Ramanathan left BTA on 21st August 2017. Her final settlement included £90-95k accrued statutory entitlement in respect of "end of y ear" serv ice

⁴ All directors hav e a normal retirement age of 65, ex cept Robin Johnson and Patricia Yates w ho hav e a normal retirement age of 60. No pension contribution for Sumathi Ramanathan as there are no pension arrangements for staff based in Dubai.

6 Paul Gauger serv ed as interim director until 31st December 2017 on FTE £143,000 & paid in local currencies conv erted back to GBP

7 Sumathi Ramanathan's salary includes an allow ance for accommodation and trav el of £2.3k. Paul Gauger's salary includes an accommodation allow ance of £55.2k

8 No pension contribution for Gav in Landry as he is only eligible to join the US pension scheme after tw elv e months of serv ice.

5 Gav in Landry w as appointed as director on 23rd August 2017 w ith an FTE of £110k - 115k. • Ms T Warw ick’s serv ices as an Interim Director of APMEA region w ere procured by the BTA through Scherw ick Group Ltd and the serv ice started in August 2017 and ended in May 2018

w hen she officially joined BTA on a permanent contract w ith an FTE of £134,000. For 2017/18, ex penditure of £119,246 w as incurred in respect of her serv ices.

44




2016-17

Name

Salary &

Allow ances

(£’000)1

Bonus Payments

(£'000)

Accrued pension

benefits during the

year (£'000)

Total

Remuneration

Figure (£'000)

Employer pension

contributions

(£'000)

Real Increase in

pension at

Retirement Age

(£'000)

Total accrued

pension at

Retirement Age as

at 31.03.2017

(£'000)

Cash equivalent

transfer value as

at 31.03.2016

(£'000)

Cash equivalent

transfer value as

at 31.03.2017

(£'000)

Real increase

cash equivalent

transfer value

(£'000)2

Sally Balcombe (Accounting Officer BTA/CEO VB)⁴ 155-160 15-20 46 215-220 15-20 2.5-5 5-10 76 166 81

Hazel Cunningham (Director, Business Services)⁴ 120-125 5-10 40 165-170 15-20 0-2.5 0-5 28 85 50

Joss Croft (Director, Britain Marketing)3 4 15-20 0 3 15-20 0-5 0-2.5 25-30 600 807 200

Patricia Yates (Director, Strategy and Communications)⁴ 115-120 0-5 138 255-260 25-30 5-7.5 20-25 484 809 314

Robin Johnson (Director, Europe)4 105-110 5-10 129 240-245 20-25 5-7.5 15-20 182 412 222

Carol Dray (Director Commercial) 4 6 115-120 0 34 150-155 15-20 0-2.5 0-5 5 55 44

Clare Mullin (Director, Britain Marketing)4 5 25-30 0 5 30-35 0-5 0-2.5 0-5 0 7 5

Sumathi Ramanathan (Director, APMEA Region)4 5 7 145-150 0-5 0 150-155 0 0 0 0 0 0

Paul Gauger (Interim Director, Americas)4 5 7 135-140 0-5 20 155-160 15-20 0-2.5 5-10 111 174 58

Andrew Stokes (Director, England) 4 6 90-95 0 33 125-130 10-15 0-2.5 0-5 3 46 38

¹ No benefit in kind w as paid in 2016-17

2 The real increase in cash equiv alent takes into account an assumed rate of rev aluation of nil, in line w ith the Gov ernment's statutory rev aluation order for 2016/17.

3 Joss Croft left BTA on 6th May 2016 on an FTE of £93,702.

⁴ All Directors hav e a normal retirement age of 65, ex cept Robin Johnson and Patricia Yates w ho hav e a normal retirement age of 60. No pension contribution for Sumathi Ramanathan as there are no pension arrangments for staff based in Dubai.

5 Clare Mullin started on 9th Jan 2017 w ith an FTE of £120,000. Paul Gauger w as appointed as interim Director on 1st May 2016 w ith an FTE of £143,000. Sumathi Ramanathan w as appointed as Director on 1st April 2017

6 Carol Dray and Andrew Stokes w ere initially appointed as interim Directors. Carol Dray w as confirmed as permanent on 7th July 2016. Andrew Stokes w as confirmed as permanent on 3rd April 2017

7 Sumathi Ramanathan's salary includes an allow ance for accommodation and trav el of £5.5k. Paul Gauger's salary includes an accommodation allow ance of £42.3k

45




‘Salary’ includes gross salary, consolidated performance pay and any other allowances. Bonuses paid are accounted for separately. The pension benefits for the Executives are provided through the British Tourist Boards’ Pension Scheme (see Note 25 to the Accounts).

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director

in their organisation and the median remuneration of the organisation’s workforce. The banded remuneration of

the highest-paid Director in BTA in the financial year 2017/18 was £180,000-£185,000 (2016/17 - £170,000-

£175,000). This was 5.1 times (2016/17: 4.8) the median remuneration of the workforce, which was £36,326

(2016/17: £36,309). The increase in the salary for the highest-paid director from 2016/17 to 2017/18 is due to the

change in performance related pay increase. The median remuneration is based on all UK and overseas staff

only; it excludes agency workers and contractors.

No employees were paid more than the highest paid director. Remuneration ranged from £5,000 to £185,000

(2016/17: £4,000 - £175,000). Total remuneration includes salary, non-consolidated performance-related pay,

bonuses and benefits-in-kind. It does not include severance payments, employer pension contributions and the

cash equivalent transfer value of pensions.

Sally Balcombe

Accounting Officer

BTA

13 May 2019

46

Permanent (UK) staff

Other Staff

Total staff numbers

2018

Number

173

112

2017

Number

174

115

285 289



Staff Report

VisitBritain and VisitEngland staff are employed by BTA and all employment matters are managed jointly.

Staff costs

Staff costs comprise:

Permanent Staff

£’000

2018

Others

£’000

Total

£’000

Permanent Staff

£’000

2017

Others

£’000

Total

£’000

Staff costs (including Directors) comprise:

Salaries

Social Security costs

Other pension costs

Administration operating staff costs

8,037

920

3,070

12,027

4,103

581

87

4,771

12,140

1,501

3,157

16,798

7,676

852

3,054

11,582

4,467

502

85

5,054

12,143

1,354

3,139

16,636

Average number of persons employed

The average number of whole-time equivalent persons employed during the year was as follows.

47



Staff Report (Continued)

Exit packages

Redundancy and other departure costs have been paid in accordance with the provisions of BTA’s Premature

Retirement and Redundancy policy. Exit costs (which includes pension enhancement costs) are accounted for in

full in the year of departure. Where BTA has agreed early retirements, the additional costs are met by BTA and

not the BTBP Scheme.

Exit package cost band

<£10,000 4 - 1 - 5 -

£10,000 - £25,000 2 - - - 2 -

£25,000 - £50,000 3 2 - 1 3 3

£50,000 - £100,000 1 2 - - 1 2

£100,000- £150,000 - - - - - -

£150,000- £200,000 - 1 - - - 1

>£200,000 - - - - - -

Total number of exit packages by type (total cost) 10 5 1 1 11 6

Total resource cost £230,890 £369,811 £4,000 £32,557 £234,890 £402,368

Total number of exit packages by

cost band

2017/18 (2016/17)

Number of compulsory redundancies

2017/18 (2016/17)

Number of other

departures agreed

2017/18 (2016/17)

48




Consultancy Expenditure

Included within support costs is £149.2k of consultancy expenditure for the year ending 31 March 2018 (£162k -2016/17).

Tax policy for off-payroll appointees

The Government’s review of the tax arrangements of public sector appointees highlighted the possibility of artificial arrangements to enable tax avoidance, such as the use of personal service companies. The results and

recommendations of this review were published on 23 May 2012, including measures for organisations to implement

from 2013/14.

All new VisitBritain and VisitEngland contracts and contract renewals have been amended to include a clause which

allows us to obtain assurance that individuals are paying the correct amount of tax and national insurance

contributions.

The tables below show the number of off-payroll engagements. Note: table 3 shows the number of individuals that

have been deemed “board members, and/or, senior officials with significant financial responsibility”, between 1 April 2017 and 31 March 2018. This is a wider definition than is used for determining which individuals should be included

in the Remuneration Report.

Table 1: For all off-payroll engagements as of 31 March 2018, for more than £245 per day and that last for longer

than six months.

No. of existing engagements as of 31 March 2018 5

Of which...

No. that have existed for less than one year at time of reporting. 1

No. that have existed for between one and two years at time of reporting. 1

No. that have existed for between two and three years at time of reporting. 0

No. that have existed for between three and four years at time of reporting. 2

No. that have existed for four or more years at time of reporting. 1

Confirmation that all existing off-payroll engagements, outlined above, have at some point

been subject to a risk based assessment as to whether assurance is required that the

individual is paying the right amount of tax and, where necessary, that assurance has

been sought.

Confirmed

49




Table 2: For all new off-payroll engagements, or those that reached six months in duration, between 1 April 2017 and

31 March 2018, for more than £245 per day and that last for longer than six months.

No. of new engagements, or those that reached six months in duration, between

1 April 2017 and 31 March 2018 1

Of which...

No. assessed as caught by IR35 0

No. assessed as not caught by IR35 1

No. engaged directly (via PSC contracted to department) and are on the departmental

payroll

0

No. of engagements reassessed for consistency / assurance purposes during the year. 0

No. of engagements that saw a change to IR35 status following the consistency review 0

Table 3: For any off-payroll engagements of board members, and/or, senior officials with significant financial

responsibility, between 1 April 2017 and 31 March 2018.

No. of off-payroll engagements of board members, and/or,

senior officials with significant financial responsibility, during

the financial year.

1

No. of individuals that have been deemed “board members, and/or, senior officials with significant financial responsibility”,

during the financial year. This figure should include both off-

payroll and on-payroll engagements.

17

Employment

The number of employees at 31 March 2018 classified by gender is as follows:

Male Female

Senior Executives 3 6

Total number of employees 90 199

93 205

50




Internal Communications and trade union relationships

BTA recognises the Public and Commercial Services Union (PCS) as representing the interests of staff in official

negotiations. During the year PCS was consulted on a range of issues, including contractual terms and conditions,

organisational changes, pay and grading issues, and proposed future pension scheme changes. The PCS union

represents staff in grievance and disciplinary cases.

BTA ensures that information is provided to employees in a timely manner and they are consulted on significant

matters. This is achieved through the use of a range of communication channels including the staff intranet

(incorporating up-to-date news and information, as well as networking forums), staff surveys, regular presentations

on initiatives and developments within the organisation and industry, as well as meetings with senior management.

BTA’s trade union facility time information is presented below:

Human Capital Management

BTA’s aim is to attract and retain a quality workforce by investing in training, development and rewards. The focus is on keeping staff challenged and engaged through numerous learning opportunities and programmes offered, and developing talent in-house to ensure that the necessary skills and expertise are available within the organisation to continue to deliver a quality service. In addition, remuneration and benefits packages are closely monitored to ensure employee benefits are market related and retention measures are effective.

Table 1

Relevant union officials

Table 2

Percentage of time spent on facility time

Table 3

Percentage of bill spent on facility time

Table 4

Paid Trade Union activities

Number of employees who were relevant union officials during the relevant period Full-time equivalent employee number

5 5

0% 2

1%-50% 3

51%-99% -

100% -

Time spent on paid trade union activities as a percentage of total paid facility time

hours calculated as: (total hours spent on paid trade union activities by relevant

union officials during the relevant period / total paid facility time hours) X 100

36%

Provide the total cost of facility time 32,743

Provide the total pay bill 16,468,000

(Total cost of facility time / total pay bill) X 100 0.2%

51




Pay BTA operates a performance management system and individual objectives are aligned to the Corporate Business Plans. Performance is assessed against targets and demonstration of corporate competencies with payments made based on achievements in both areas. All employees are rewarded purely on the basis of performance. There are no automatic annual increments.

Pension

The UK BTA currently offers a defined benefit (final salary) pension for all employees employed before 1 April

2017, although it is proposed to close this scheme and establish a defined contribution scheme. As stated on

page 27 the aforementioned change it is now expected during 2019 subject to approval by relevant parties. BTA

introduced a new defined contribution scheme, in agreement with the BTB Pension Trustees, for new starters

from 1 April 2017 and all new staff in the UK are auto-enrolled into this scheme. BTA also offers a defined

benefit (final salary) pension for its employees in the USA and defined contribution schemes in other parts of the

world

Contracts of Employment

Contracts are open-ended rolling contracts; notice periods for staff are between 1 and 6 months. Termination

payments are limited to the notice period unless redundancy is applied in which case a formula is used to calculate

the amount of compensation (approximately equating to a lump sum compensation of one month’s pay for each complete year of service). Fixed-term contracts are used to employ staff for short project based assignments as

appropriate.

Sickness Absence

The average sickness absence per full time employee in 2017/18 was 2.4 days compared with 1 day in 2016/17.

Training and Development

BTA’s performance management system has been reviewed, completely revised and relaunched, and is aligned to

the corporate priorities of VisitBritain and VisitEngland. As part of the performance management process, training and

development needs are identified and all staff are encouraged to take ownership of their own development through

Personal Development Plans.

Health and safety of our people

Despite a predominantly administrative and office based workforce BTA is firmly committed on working towards zero

accidents at work. BTA maintains stringent safety standards that helps to deliver good health and safety practices in

the business. These are regularly reviewed and all staff receive training on this aspect to ensure a safe and healthy

work environment for all.

Equal Opportunities and Disability

BTA maintains an inclusive environment. All employees have equal opportunities for employment and advancement

solely on the basis of ability, qualifications and relevant skills and experience for the work. We are committed to an

environment where there is no discrimination on any grounds including age, gender, racial or national origin, religious

belief, sexual orientation or disability.

BTA regularly monitors and reports on a range of staff statistics including gender and ethnic origin.

Investor in People

VisitBritain was recognised as an ‘Investor in People’ (IIP) from 1994 until October 2018, with the Silver status.

We have not sought renewal of investors in people at this time. We are evaluating our training and development

programme and made the decision, to use the money it would have cost for IIP, to invest directly into staff

training and development activities.

52



PARLIAMENTARY ACCOUNTABILITY DISCLOSURES

Fees and charges

BTA is required in accordance with HM Treasury’s Managing Public Money to disclose results for the areas of its

activities where fees and charges are levied. BTA considers its retail activities to be the only area of the business

where material fees and charges are levied.

Gross Income Full cost Surplus

£'000 £'000 £'000

2017/18

Retail activities 27,774 26,461 1,313

2016/17

Retail activities 28,350 26,823 1,527

The financial objective of the BTA’s retail activities for which fees and charges are rendered is to recover the costs of

providing the services and to make a contribution towards financing other operational costs. These activities have

enabled BTA to offset some of its costs by marketing Britain and offering tourism related services to businesses and

individuals around the world travelling to the United Kingdom. During 2013/14 BTA identified a particular opportunity

in delivering online tourism services and invested substantially in this area to develop its online commercial retail

capabilities through its VisitBritain online retail shop. This activity delivers a vital service to businesses, the general

public and tourists worldwide and is expected to continue to make a substantial contribution towards financing our

business operations as set out in our strategic objectives.

Losses and special payments and other disclosures

Foreign exchange losses incurred during the year amounted to £438k (2016/17: no losses above reporting threshold).

By nature of its operations and overseas activities, BTA is naturally exposed to foreign currency risk. The weakening

of the Pound Sterling during the current year has resulted in the loss recognised during the year. BTA’s foreign currency risk management policy is discussed further in note 3 of the notes to the financial statements. In addition,

BTA incurred a loss of £8k in connection with a staff redundancy settlement as a result of an error in employees tax

and NIC calculation.

BTA incurred no special payments or made any gifts during the year (2016/17: Nil) that needs to be reported in

accordance with HM Treasury’s Managing Public Money guidance. BTA is not aware of the existence of any remote contingent liabilities (2016/17: None) that needs to be reported.

The Parliamentary accountability disclosures falls within the scope of the Comptroller and Auditor General’s audit opinion on the accounts and is audited.

53



SUSTAINABILITY REPORT

Introduction

Consistent with practices from previous years, we continued with initiatives during 2017-18 to improve energy efficiency and our overall impact on the environment. Around the world we have a policy of co-locating with our public diplomacy partners wherever possible. Of our 21 overseas offices in 15 countries, 17 are located within FCO or British Council premises. Our London head office is also based within another government department building. This shared arrangement of energy usage and waste disposal has helped us significantly reduce our carbon footprint.

Summary of Performance

BTA’s key sustainability performance indicators are summarised below:

Sustainability area Units2017/2018 2016/2017

Non-financial indicatorsTotal CO2 emissions Tonnes 483 677

Energy consumption KWh 536,125 917,937

Total waste Tonnes 42 47

Water consumption Meter ³ 1,925 3,328

Financial indicatorsEnergy consumption costs £'000 £62.9 £91.2

Official business travel costs £'000 £371.1 £380.7

Waste disposal costs £'000 £1.42 £9.91

Water supply costs £'000 £1.54 £3.22

Performance

Notes: The scopes and conversion rates are set out in the Guidelines to Defra/DECC’s Greenhouse Gas Protocol Conversion Factors for Company Reporting.

The rental arrangements for most of our overseas offices mean energy, water consumption and waste data are not readily available. Best estimates have been made using data from comparable offices.

The CO2 emissions/energy consumption/Waste/Water consumption data and the costs therein are based on the full year data provided for the new premises in which BTA are located despite only occupying the building for 6 month in 17/18. This is due to the non-availability of the data from the previous premises.

54

300 400 300'000

400TONNES BTA Carbon Footprint 2016/17 and 2017/18 (Tonnes)

0

50

100

150

200

250

0

50

100

150

200

250

300

350

Electricity & Gas Official Travel Rail Official Travel Road Official Travel Air

2017/18 2016/17 2017/18 cost 2016/17 cost

1250 12'000

50TONNES Waste Volumes and Disposable Routes (Tonnes)

0

2

4

6

8

10

0 5

10 15 20 25 30 35 40 45

Total Waste Landfill Waste Recycled Waste Incinerated waste

2017/18 2016/17 2017/18 cost 2016/17 cost



Sustainability Report (Continued)

BTA Carbon Footprint

2017/2018 2016/2017

Non- Financial Indicators (Tonnes)

Total Waste 41.58 47.11 Hazardous waste Total - -

Landfill 12.70 15.71

Reused/Recycled 14.05 21.07

Incinerated/Energy from Waste 14.83 10.32

Financial Indicators £’000

Total disposal cost £1.42 £9.91

Hazardous waste - Total Disposal cost - -

Non-hazardous waste - Total disposal cost Landfill 0.43 6.84

Reused/Recycled 0.48 0.57 Incinerated/energy from waste 0.51 2.50

55



Sustainability Report (Continued)

In 2017/18, BTA Head office in London moved to a new location in September 2017. This has resulted in significant changes of how different areas of the sustainability are measured and therefore reported as compared with 2016/17.

As per the new agreement, BTA is responsible for 4.14% of the building at 1 Victoria Street. This is the percentage on which the main sustainability areas attributable to BTA have been calculated. This is a marked departure from previous years wherein the number of employees through the year was utilised to calculate the relevant figures. This is a reflection of the fact that in the new premises, BTA occupy a much lesser proportion of a bigger building. As such, 17/18 sees a marked decrease in the Energy/Water consumption levels as well the levels of CO2 emissions (and therefore the costs) as compared with 16/17 that are attributable to BTA.

Following from above, BTA Head office in London has moved from 1 Victoria Street to 151 Buckingham Palace Road in October 2018.

In addition to the above decreases in CO2 emissions and Energy/Water consumption levels there was reduction in air travel during the year (please see above). We are an international organisation that needs to maintain good communication with staff around the world and to communicate our work to our stakeholders. As such there were numerous conferences/trade events/meetings for which air travel was necessary during 17/18 (as with previous years). However, despite these requirements there was a dedicated effort by all the employees in the organisation to enhance the use of information technology, such as video conferencing and webinars to hold meetings and communicate with staff in different locations as opposed to travelling to the relevant destinations by air resulting in the reduction in air travel in 17/18. The organisation hopes to continue with this policy of only travelling by air if necessary in the foreseeable future. In addition to the above, our London office has continually promoted flexible working conditions in an attempt to save on costs and environmental impact.

We also operate a Cycle Loan scheme offering staff an interest-free loan to purchase bicycles and we are also a member of the Evan`s Cycles Ride2Work scheme. This scheme takes advantage of the Government’s Green Transport Plan by allowing BTA employees to lease a new bike and receive tax savings while doing so.

The removal of individual waste bins and provision of communal separate bins for recyclable and non-recyclable waste has promoted more sustainable waste disposal practices.

Sustainable Procurement

We employ Government Buying Standards when procuring affected goods and services. Additionally, where sustainability issues are critical to the performance of a product or service, we will ensure that they are included in our selection process. Such information may include energy consumption, the life-cycle of consumables or the lifetime of a product.

Our print buying policy recommends using Forest Stewardship Council certified or recycled paper for our marketing materials, leaflets and books. We avoid using materials and print finishes that are non-recyclable and regularly review print volumes and stock levels to minimise wastage.

56



STATEMENT OF ACCOUNTING OFFICER RESPONSIBILITIES

Under Section 6(1) of the Development of Tourism Act 1969, the Secretary of State for Digital, Culture, Media

and Sport, with the consent of HM Treasury, has directed the British Tourist Authority to prepare for each financial

year a statement of accounts in the form, and on the basis, set out in the Accounts Direction. The accounts are

prepared on an accruals basis and must give a true and fair view of the state of affairs of the British Tourist

Authority and of its comprehensive net expenditure, changes in taxpayers’ equity and cash flows for the financial year.

In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government

Financial Reporting Manual and in particular to:

Observe the Accounts Direction issued by the Secretary of State for Digital, Culture, Media and Sport

including the relevant accounting and disclosure requirements and apply suitable accounting policies on

a consistent basis;

Make judgements and estimates on a reasonable basis;

State whether applicable accounting standards as set out in the Government Financial Reporting Manual

have been followed, and disclose and explain any material departures in the accounts; and

Prepare the accounts on a going concern basis.

The Accounting Officer of the Department for Digital, Culture, Media and Sport has appointed me as the

Accounting Officer of the British Tourist Authority. The responsibilities of an Accounting Officer, including

responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable,

for keeping proper records and for safeguarding the BTA’s assets, are set out in Managing Public Money published by the HM Treasury.

As Accounting Officer, I confirm that the annual report and accounts as a whole is fair, balanced and

understandable and that I take personal responsibility for the annual report and accounts and the judgments

required for determining that it is fair, balanced and understandable.

Sally Balcombe

Accounting Officer

BTA

13 May 2019

57



THE CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT AND THE SCOTTISH PARLIAMENT

Opinion on Financial statements

I certify that I have audited the financial statements of the British Tourist Authority for the year ended 31 March

2018 under the Development of Tourism Act 1969. The financial statements comprise: the Statements of

Comprehensive Net Expenditure, Financial Position, Cash Flows and Changes in Taxpayers’ Equity, and the related notes, including the significant accounting policies. These financial statements have been prepared under

the accounting policies set out within them. I have also audited the information in the Accountability Report that

is described in that report as having been audited.

In my opinion:

the financial statements give a true and fair view of the state of the British Tourist Authority’s affairs as at

31 March 2018 and of the net expenditure for the year then ended; and

the financial statements have been properly prepared in accordance with the Development of Tourism

Act 1969 and Secretary of State directions issued thereunder.

Qualified opinion on regularity

In my opinion, except for the matter described in the basis for the qualified opinion paragraph below, in all material

respects the expenditure and income recorded in the financial statements have been applied to the purposes

intended by Parliament and the financial transactions recorded in the financial statements conform to the

authorities which govern them.

Basis for the qualified opinion on regularity

The British Tourist Authority is required to comply with the requirements of HM Treasury’s “Managing Public Money”. During 2017-18, the British Tourist Authority negotiated settlement terms for a UK employee and agreed

to make a payment in lieu of notice without deducting tax or national insurance. The British Tourist Authority did

not pay employer’s national insurance on the amount. Such payments are outside of the British Tourist Authority’s delegation and require explicit approval from the Department for Digital, Culture, Media and Sport (the

Department) and HM Treasury but this approval was not obtained.

In my opinion, this exit payment did not conform with the authorities which govern it and resulted in an irregular

payment of £8,112. I consider this irregular payment to be material in the context of the failings of the control

environment.

Further details can be found in my report, below.

Basis of opinions

I conducted my audit in accordance with International Standards on Auditing (ISAs) (UK) and Practice Note 10

‘Audit of Financial Statements of Public Sector Entities in the United Kingdom’. My responsibilities under those

standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of

my certificate. Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2016. I am independent of the British Tourist Authority in accordance with the ethical

requirements that are relevant to my audit and the financial statements in the UK. My staff and I have fulfilled our

other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have

obtained is sufficient and appropriate to provide a basis for my opinion.

58



Respective responsibilities of the Board and Accounting Officer for the financial statements

As explained more fully in the Statement of Accounting Officer Responsibilities, the British Tourist Authority and

the Accounting Officer are responsible for the preparation of the financial statements and for being satisfied that

they give a true and fair view.

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Development of

Tourism Act 1969.

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to

give reasonable assurance that the financial statements are free from material misstatement, whether caused by

fraud or error. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted

in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK), I exercise professional judgment and maintain professional

scepticism throughout the audit. I also:

identify and assess the risks of material misstatement of the financial statements, whether due to fraud

or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that

is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

obtain an understanding of internal control relevant to the audit in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

of the British Tourist Authority’s internal control.

evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

conclude on the appropriateness of management’s use of the going concern basis of accounting and,

based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions

that may cast significant doubt on the British Tourist Authority’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion.

My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However,

future events or conditions may cause the entity to cease to continue as a going concern.

evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a

manner that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including any significant deficiencies in internal control that I

identify during my audit.

In addition, I am required to obtain evidence sufficient to give reasonable assurance that the income and

expenditure reported in the financial statements have been applied to the purposes intended by Parliament and

the financial transactions conform to the authorities which govern them.

59



Other Information

The Board and the Accounting Officer are responsible for the other information. The other information comprises

information included in the Performance Report and Accountability Report, other than the parts of the

Accountability Report described in that report as having been audited, the financial statements and my auditor’s report thereon. My opinion on the financial statements does not cover the other information and I do not express

any form of assurance conclusion thereon. In connection with my audit of the financial statements, my

responsibility is to read the other information and, in doing so, consider whether the other information is materially

inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be

materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of

this other information, I am required to report that fact. I have nothing to report in this regard.

Opinion on other matters

In my opinion:

• the parts of the Accountability Report to be audited have been properly prepared in accordance with

Secretary of State directions made under the Development of Tourism Act 1969;

• in the light of the knowledge and understanding of the British Tourist Authority and its environment

obtained in the course of the audit, I have not identified any material misstatements in the Performance

Report or the Accountability Report; and

• the information given in the Performance Report and Accountability Report for the financial year for which

the financial statements are prepared is consistent with the financial statements.

Matters on which I report by exception

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• adequate accounting records have not been kept or returns adequate for my audit have not been received

from branches not visited by my staff; or

• the financial statements and the parts of the Accountability Report to be audited are not in agreement

with the accounting records and returns; or

• I have not received all of the information and explanations I require for my audit; or

• the Statement of Corporate Governance by the Accounting Officer does not reflect compliance with HM

Treasury’s guidance.

Sir Amyas C E Morse Date: 16 May 2019 Comptroller and Auditor General

National Audit Office,

157-197 Buckingham Palace Road,

Victoria, London,

SW1W 9SP

60



Report of the Comptroller and Auditor General to the Houses of Parliament and the Scottish Parliament

Introduction

1. The purpose of this Report is to explain the circumstances which led me to qualify my audit opinion on regularity

on the 2017-18 financial statements of the British Tourist Authority (BTA).

2. BTA made severance payments to a number of its staff during the year which were in breach of its delegated

authority. The Accounting Officer’s Statement of Corporate Governance goes some way towards explaining

how this occurred, citing poor staff skills and knowledge. The statement does not, however, explain that BTA

did not provide all key information to its sponsoring department, the Department for Digital, Culture, Media and

Sport (the Department), to inform the Department’s decision on whether to support BTA’s case for retrospective approval of one payment. This matter is discussed in my Report.

Qualified audit opinion arising from irregular expenditure on exit payments

3. During the year, BTA incurred expenditure outside of the agreed framework, and did not comply with HM

Treasury rules, by making a number of severance payments including extra-contractual elements, without the

necessary approvals. BTA sought and received retrospective approval from HM Treasury for three of four such

payments, but not for one of them. As a result, £8,112 of expenditure during the year was irregular.

4. HM Treasury sets out the requirements for managing funds in the public sector through Managing Public

Money. It requires public sector bodies to act with probity, transparency and in the public interest. Managing

Public Money sets out guidance for the governance and accounting for potentially novel, contentious or

repercussive transactions including special severance payments.

5. Special severance payments are severance payments made to individuals which are beyond statutory or

contractual requirements. Managing Public Money5 states that special severance payments always require

HM Treasury consent before proceeding to payment because they are usually novel, contentious and

potentially repercussive. Managing Public Money provides examples of transactions requiring explicit HM

Treasury consent and explains that it is improper for a public sector organisation to spend or make

commitments outside of agreed delegations. Where prospective consent has not been obtained from HM

Treasury, HM Treasury may subsequently agree to give retrospective consent, but only if the expenditure in

question would have been agreed if permission had been sought at the right time. HM Treasury make this

judgement based on the business case provided by the entity seeking retrospective approval.

6. The exit package information reported on pages 48 and 86 of the Annual Report and Accounts discloses 11

exit payments recorded during 2017-18. My audit found that BTA management did not comply with Managing

Public Money requirements in four of these exit payments as special severance payments were agreed or

made without having received HM Treasury approval in advance. This means that the commitment to make

severance payments totalling £62,489 was outside of BTA’s framework of authorities.

7. BTA had identified one of the four cases itself and had applied for and received retrospective approval from

HM Treasury. This regularised the transaction. The other three cases were identified by my audit and, when

I advised BTA management in June 2018 to seek retrospective approval from HM Treasury for each of these

payments, BTA management challenged this conclusion as it believed that HM Treasury approval was not

required.

5 Managing Public Money: Use of public funds, Treasury consents, paragraph 2.3.4 – 2.3.5. 61



8. In two of the remaining three cases, BTA made redundancy payments to staff in an overseas office despite

the individuals having no contractual right to redundancy payments. Notwithstanding this, BTA believed that

there were firm expectations under the custom and practice of employment contracts in this country, a position

it argues was supported by its legal advice. (BTA had made two similar severance payments to departing staff

in this overseas office in 2016-17 for which it sought, and received, retrospective HM Treasury approval to

regularise). Following my audit, BTA approached the Department to request HM Treasury approval to

regularise the two payments made in 2017-18. HM Treasury granted its retrospective approval on 13 July

2018.

The Department did not support BTA’s request for retrospective approval of one special severance payment

9. In the final case, BTA negotiated settlement terms with a UK employee, agreeing to make a payment in lieu

of service to the individual without deducting income tax and employee national insurance contributions. BTA

also failed to pay employer’s national insurance on the payment. BTA had no authority to enter into such an

agreement without prior approval from the Department and HM Treasury. The facts are as follows:

• BTA is required to inform the Department of all proposed severance payments and, when my audit

identified this issue, BTA initially notified the Department in July 2018 that the payment to this individual

was contractual.

• My team reviewed the payment and supporting evidence and concluded that the tax and national

insurance elements were non-contractual and therefore required approval from the Department and HM

Treasury.

• When my team met the Department to discuss the case in August 2018, they found that there was a

disparity between the Department’s account of the circumstances leading up to the payment and the evidence that we had seen as part of the audit. This was because BTA had not disclosed all pertinent

evidence to the Department.

• After reviewing all the evidence, the Department informed HM Treasury, in November 2018, that it could

not support BTA’s request for retrospective approval to regularise this payment. The Department cited BTA’s history of seeking retrospective approval for severance payments in 2016-17 and 2017-18 with this

being indicative of inadequate planning, management and weak governance.

• On 20 December 2018, HM Treasury responded to the Department, agreeing with the Department’s decision not to support BTA’s request for retrospective approval. In addition, HM Treasury stated that it

expects BTA to make significant improvements to how it manages special payments and HM Treasury

would not be granting retrospective approval for any further requests of this nature until it had confidence

that BTA was managing these payments effectively.

10. Since retrospective approval of the payment has not been received from the Department and HM Treasury,

the extra-contractual element of this payment, totalling £8,112, remains in breach of regulations. I consider

this irregular payment to be material in the context of the failings of the control environment.

The British Tourist Authority made extra-contractual severance payments without seeking prior approval in the

previous year

11. As noted above, this is not the first time that BTA has not adhered to HM Treasury approval requirements.

Following my audit of the 2016-17 financial statements, I reported concerns to those charged with

governance at BTA that BTA had made two special severance payments without HM Treasury approval and

these were identified only by my audit. As with two of the 2017-18 cases, the two 2016-17 cases that I brought

to management’s attention were for redundancy payments to staff in overseas offices where the individuals

had no contractual right to redundancy payments. I informed BTA that it would need to secure retrospective

approval from HM Treasury to regularise these payments, and this was sought and obtained.

62



12. In my June 2017 report to those charged with governance at BTA, I recommended that BTA management

put in place appropriate procedures to ensure future adherence to required approval procedures and BTA

management agreed to do this. However, within one month of this report, BTA had entered into another

special severance agreement without seeking prior HM Treasury approval with a further three non-

contractual settlements being agreed in the six months that followed, again without HM Treasury approval.

Action taken by the British Tourist Authority and the Department for Digital, Culture, Media and Sport

13. BTA’s repeated contravention of the approvals regulations for severance payments are symptomatic of failures in its internal control environment. I welcome and endorse BTA’s identification in its 2017-18

Statement of Corporate Governance by the Accounting Officer of the need for significant improvement in the

general control environment.

14. The Department commissioned a review of BTA’s HR practices during 2017-18 and concluded that the

findings were cause for considerable concern. The Department’s Permanent Secretary advised BTA that remedying issues identified in the review should be a top priority for BTA’s management team and, in August

2018, asked BTA to formulate a proposal to address the key findings, an implementation plan and details of

how BTA will ensure it delivers against relevant compliance and control specifications across the business.

The Department’s Director of Finance and Commercial has also asked for assurances that BTA is taking

steps to ensure that no further breaches of delegated authorities occur.

Sir Amyas C E Morse Date: 16 May 2019

Comptroller and Auditor General

National Audit Office

157-197 Buckingham Palace Road

Victoria

London

SW1W 9SP

63


Statement of Comprehensive Net Expenditure for the Year Ended 31 March 2018

3. FINANCIAL STATEMENTS

Statement of Comprehensive Net Expenditure

Note 2018 2017

£’000 £’000

Revenue

Income from activities 6 33,344 33,014

Other income 7 845 1,452

34,189 34,466

Employee benefits costs 8 (16,798) (16,636)

Depreciation and amortisation 17, 18 (709) (480)

Other operating charges 9 (69,728) (69,428)

Grants paid 11 (6,486) (5,293)

Re-organisation costs 12 (236) (665)

(93,957) (92,502)

Net Expenditure before finance income 13 (59,768) (58,036)

Finance income 15 29 27

Finance expense 15 (686) (1,016)

Net Expenditure for the year (60,425) (59,025)

Other Comprehensive Income / (Expenditure)

Items that will not be reclassified to net expenditure

Decrease (Increase) in UK pension liability on unfunded schemes 25 9 14

Remeasurements of defined benefit pension obligations 25 (4,559) 4,844

Other Comprehensive Expenditure (4,550) 4,858

Total Comprehensive Net Expenditure for the year (64,975) (54,167)

All income and expenditure derived from continuing activities.

The Notes on pages 68 to 107 form part of these financial statements.

64


Statement of Financial Position as at 31 March 2018

Statement of Financial Position

Note 2018 2017

£’000 £’000

AssetsNon-current assets

Property, plant and equipment 17 722 367

Intangible Assets 18 14 230

Investment in subsidiary 19 1 1

Retirement benefit assets 25 97 27

Total non-current assets 834 625

Current assets

Inventories 20 6,108 6,354

Trade and other receivables 21 3,014 4,429

Derivative financial assets 24 - -

Cash and cash equivalents 22 8,063 4,834

Total current assets 17,185 15,617

Total assets 18,019 16,242

Liabilities

Current liabilities

Trade and other payables 23 (14,850) (13,565)

Derivative financial liabilities 24 - (16)

Total current liabilities (14,850) (13,581)

Total Assets less Current Liabilities 3,169 2,661

Non-current liabilities

Retirement benefit liabilities 25 (31,197) (26,347)

Total non-current liabilities (31,197) (26,347) Total liabilities (46,047) (39,928)

Total Net Liabilities (28,028) (23,686)

Taxpayers' Equity

Income and expenditure reserve (28,028) (23,686)

Revaluation reserve -

(28,028) (23,686)

The financial statements were approved by the Board on 26th March 2019 and were signed on its behalf by:

Sally Balcombe Accounting Officer BTA


65


Statement of Cash Flows for the Year Ended 31 March 2018

Statement of Cash Flows

Note 2018 2017

£’000 £’000

Cash flows from operating activities

Net expenditure for the year (60,425) (59,025)

Adjustments for:

Depreciation and amortisation 17, 18 709 480

Defined benefit pension cost 25 3,666 2,612

Net finance costs – UK & US pension scheme 25 686 1,016

Unrealised foreign exchange difference on US pensions scheme 25 7 26

Defined benefit employer pension contribution 25 (4,129) (2,403)

Fair value adjustment on financial assets 24 (16) (53)

Cash flows from operating activities before (59,502) (57,347)

changes in working capital and provisions

Decrease in trade and other receivables 21 1,415 1,627

(Increase) in inventories 20 246 (1,839)

(Decrease)/Increase in trade and other payables 23 1,285 (1,483)

Net cash flows from operating activities (56,556) (59,042)

Investing activities

Purchases of property, plant and equipment 17 (848) (462)

Purchases of Intangible Assets 18 - (42)

Net cash (outflows) from investing activities (848) (504)

Financing activities

Grant-in-aid received from the DCMS 5 60,633 56,972

Net cash flows from financing activities 60,633 56,972

Net increase/(decrease) in cash and cash equivalents 3,229 (2,574)

Cash and cash equivalents at beginning of the year 26 4,834 7,408

Cash and cash equivalents at end of the year 26 8,063 4,834


66


Statement of Changes in Taxpayers’ Equity for the Year Ended 31 March 2018

Statement of Changes in Taxpayers’ Equity

Total Income and Taxpayer's Expenditure deficit

£’000 £’000

Balance as at 1 April 2016 (26,491) (26,491)

Changes in reserves 2016/17

Total comprehensive net expenditure for the year (54,167) (54,167)

Grant in Aid - Resource (see note 5) 56,472 56,472

Grant in Aid - Capital (see note 5) 500 500

Balance as at 31 March 2017 (23,686) (23,686)

Changes in reserves 2017/18

Total comprehensive net expenditure for the year (64,975) (64,975)

Grant in Aid - Resource (see note 5) 59,667 59,667

Grant in Aid - Capital (see note 5) 966 966

Balance as at 31 March 2018 (28,028) (28,028)


67

1


Notes Forming Part of the Financial Statements for the Year Ended 31 March 2018

NOTES TO THE ACCOUNTS

Accounting Policies

These financial statements have been prepared in accordance with the 2017/18 Government Financial Reporting

Manual (FReM) issued by HM Treasury and the Accounts Direction issued by the Secretary of State under the

Development of Tourism Act 1969. The accounting policies contained in the FReM apply International Financial

Reporting Standards (IFRS) as adapted or interpreted for the public sector context. Where the FReM permits a

choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular

circumstances of BTA, for the purpose of giving a true and fair view, has been selected. The particular accounting

policies adopted by BTA are described below. They have been applied consistently in dealing with items that are

considered material to the accounts, unless otherwise stated.

The principal accounting policies adopted in the preparation of the consolidated financial statements are set out

below. The policies have been consistently applied to all of the years presented unless otherwise stated.

Basis of Preparation and Going Concern

These accounts have been prepared under the historical cost convention modified to account for the revaluation

of property, plant and equipment and inventories.

The financial statements have been prepared on a going concern basis, which assumes that BTA will continue in

operational existence for the foreseeable future. At the year-end 31 March 2018, BTA had a taxpayers’ deficit of £28,028,000 (2016/17: £23,686,000).

The Board has considered the position of BTA, with respect to its obligations to ensure the business can continue

in operational existence for the foreseeable future and confirms its approval to adopt the going concern basis for

preparing these accounts.

The main factors the Board of BTA has considered in reaching this conclusion are summarised as follows:

BTA is a non-departmental public body that is funded by the Department for Digital, Culture, Media and

Sport (DCMS) through the Comprehensive Spending Review (CSR) process;

BTA operating cash flows, taking into consideration Grant in aid funding, remains positive and based on

current forecasts and budgets it will continue to do so for the foreseeable future;

The taxpayers deficit is considered to be primarily caused by the recognition of the retirement benefit

obligation and related actuarial losses in 2010 and subsequently. The liability recognised in 2010

amounted to £21,714,000 and at 31 March 2018 it reflected a balance of £31,029,000. Discussions and

negotiations are in progress with the UK Pension Trustees, DCMS, HM Treasury and the Pensions

Regulator with regard to the covenant. The outcome of these discussions and the conclusion of work

undertaken by the BTA in relation to future pension provision will inform the Actuarial Triennial valuation;

and the agreement to rescheduling a planned programme of repayments to clear the deficit.

On this basis, the Board considers it appropriate to prepare the financial statements on a going concern basis.

Government Grants

Grant-in-aid received for revenue purposes from the sponsoring body is treated as financing by crediting it to the

income and expenditure reserve per FReM 8.1.13. Grant-in-aid received for the purchase of fixed assets in

general is credited to the income and expenditure reserve.

68



Accounting Policies (Continued)

Property, Plant and Equipment

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes

directly attributable costs.

Property, plant and equipment are subsequently carried at current value in existing use and are subject to

revaluation under Modified Historic Cost Accounting (MHCA) when material. Changes in current value in existing

use are recognised in the revaluation reserve. An appropriate transfer is made from the revaluation reserve to the

income and expenditure reserve when property, plant and equipment are expensed through the Statement of

Comprehensive Net Expenditure (e.g. through depreciation, impairment or sale).

BTA has a policy of capitalisation of all property, plant and equipment over £1,000.

Depreciation

Depreciation is provided on all items of property, plant and equipment to write off the carrying value of items

evenly over their expected useful economic lives or to their estimated residual values. It is applied at the following

rates:

Improvement to leasehold land and building - the lease term

Fixtures and fittings - six years*

Computer equipment - three years*

* For these categories of assets, depreciation is charged for a full year in the year of purchase and no charge is

made in the year of disposal.

Intangible assets

Acquired intangible assets are initially recognised at cost. Costs are capitalised on the basis of the costs incurred

to acquire and bring into use the specific software.

Intangible assets are subsequently carried at current value in existing use. Where no active market exists of the

intangible assets, current value in existing use is determined with reference to the lower of depreciated

replacement cost and value in use (if the asset is income generating). Changes in current value in existing use

are recognised in the revaluation reserve. An appropriate transfer is made from the revaluation reserve to the

income and expenditure reserve when intangible assets are expensed through the Statement of Comprehensive

Net Expenditure (e.g. through amortisation, impairment or sale).

Costs associated with maintaining computer software are recognised as an expense as incurred. Development

costs that are directly attributable to the design and testing of identifiable and unique software products controlled

by BTA are recognised as intangible assets if the following can be demonstrated:

it is technically feasible to develop the product for it to be sold;

adequate resources are available to complete the development;

there is an intention to complete and sell the product;

the BTA is able to sell the product;

sale of the product will generate future economic benefits; and

expenditure on the project can be measured reliably.

69




Computer software development costs recognised as assets are amortised over their estimated useful lives, which

does not exceed three years. The amortisation expense is included in the Statement of Comprehensive Net

Expenditure.

Development expenditure not satisfying the above criteria and expenditure on the research phase of internal

projects are recognised in the Statement of Comprehensive Net Expenditure as incurred.

Inventories

Inventories consist of transport and attraction tickets, publications and maps/guides. Inventories are initially

recognised at cost, and subsequently measured at the lower of cost and net realisable value. Net realisable value

is estimated selling price in the ordinary course of business less further expected costs to be incurred to

completion and estimated costs necessary to make the sale. Costs incurred in producing publications and

promotional items for which no revenue is obtained are charged to the Statement of Comprehensive Net

Expenditure in the year in which they are incurred.

Derivatives and Financial Instruments

The recognition and measurement of financial instruments complies with IAS 39 ‘Financial Instruments -

Recognition and Measurement’ in so far as it applies to BTA.

Financial Assets

BTA has not classified any of its financial assets as held to maturity or available for sale.

BTA accounting policy for each category is as follows:

Fair value through profit and loss: This category comprises only in-the-money derivatives. They are carried in the

Statement of Financial Position at fair value with changes in fair value recognised in the Statement of

Comprehensive Net Expenditure in ‘other operating charges’. Other than derivative financial instruments which

are not designated as a hedging instrument, BTA does not have any assets held for trading nor does it voluntarily

classify any financial assets as being at fair value through profit and loss.

Receivables: These assets are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. They arise principally through the provision of goods and services to customers (e.g.

trade receivables). They are recognised at fair value plus transaction costs that are directly attributable to their

acquisition or issue, and subsequently carried at amortised cost using the effective interest rate method.

Financial Liabilities

Financial liabilities measured at amortised cost: This category includes trade payables and other short-term

monetary liabilities, which are recognised at fair value and subsequently carried at amortised cost using the

effective interest rate method.

Financial liabilities measured at fair value through profit and loss: This category comprises only out of the money

derivatives. They are carried in the Statement of Financial Position at fair value with changes in fair value

recognised in the Statement of Comprehensive Net Expenditure in other operating expenses.

70




Provisions for Liabilities and Charges

Provisions are made when a current obligation exists for a future liability in respect of a past event and where the

amount of the obligation can be reliably estimated. Restructuring provisions are made for direct expenditure of a

business reorganisation where the plans are sufficiently detailed and well advanced, approved by the Board of

BTA and where appropriate communication to those affected has been undertaken at the Statement of Financial

Position date.

Impairment of Non-financial Assets (excluding Inventories, Investment Properties and Deferred Tax Assets)

Non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that

their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable

amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried

out on the asset's cash-generating unit (i.e. the lowest group of assets in which the asset belongs for which there

are separately identifiable cash flows).

Impairment charges are included in the other operating charges line item in the Statement of Comprehensive Net

Expenditure, except to the extent they reverse gains previously recognised, in which case they are debited to the

revaluation reserve.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties

on the part of the counterparty or default or significant delay in payment) that BTA will be unable to collect all of

the amounts due under the terms receivable, the amount of such a provision being the difference between the

net carrying amount and the present value of the future expected cash flows associated with the impaired

receivable. For trade receivables, which are reported net; such provisions are recorded in a separate allowance

account with the loss being recognised within administrative expenses in the Statement of Comprehensive Net

Expenditure. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset

is written off against the associated provision.

Translation of Foreign Currencies

Foreign currency transactions arising from normal trading activities are recorded at the rates in effect at the date

of the transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end are translated

at the year-end exchange rate. Foreign currency gains and losses are credited or charged to the Statement of

Comprehensive Net Expenditure as they arise.

Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised

immediately in the consolidated Statement of Comprehensive Net Expenditure.

Value Added Tax (VAT)

UK VAT - BTA is subject to partial restriction on the deductibility of VAT on inputs calculated in accordance with

a formula agreed with HM Revenue and Customs (HMRC). The amount of irrecoverable VAT is charged to the

Statement of Comprehensive Net Expenditure in the year to which it relates.

Overseas VAT - In countries where BTA is not registered for VAT and does not recover VAT the costs of activities

are charged gross, inclusive of VAT, to the Statement of Comprehensive Net Expenditure. In countries where

BTA recovers VAT, either fully or partially, the treatment of irrecoverable VAT is the same as for UK VAT.

71




Leased Assets - Operating Leases

Leases of property, plant and equipment where BTA holds substantially all the risks and rewards of ownership

are classified as finance leases. BTA currently has no leases of this type.

Leases where a significant portion of the risks and rewards are held by the lessor are classified as ‘operating leases’. All leases regarded as operating leases and rentals are charged to the Statement of Comprehensive Net

Expenditure on a straight-line basis over the period of the lease. Any premium or discount on the acquisition of a

lease is spread over the life of the lease on a straight-line basis.

Revenue

Revenue represents the fair value of consideration received or receivable for services provided and goods sold,

net of discount and sales taxes. Revenue from long term contractual arrangements is recognised based on the

percentage of completion method.

Revenue from the Quality Assessment Schemes is derived from annual participation fees and one-off joining fees

from those who participate in the schemes. Only when an assessment has been physically undertaken is the

participation fee recognised as income. New joiners to the scheme pay a non-refundable joining fee which is

recognised as income when received.

Retirement Benefits

Employee benefits, including pensions and other post-retirement benefits are presented in these financial

statements in accordance with IAS 19 ‘Employee Benefits’. BTA has both defined benefit and defined contribution plans.

Defined Contribution Plan

A defined contribution plan is a pension plan under which BTA pays fixed contributions into a scheme and has no

legal or constructive obligations to pay further if the fund does not hold sufficient assets to pay all employees the

benefits relating to employee service in the current and prior periods.

Contributions to defined contribution pension schemes are charged to the Statement of Comprehensive Net

Expenditure in the year to which they relate.

Defined Benefits Scheme

A defined benefit plan is a plan that is not a defined contribution plan. Typically defined benefit plans define an

amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors

such as age, years of service and compensation.

Defined benefit scheme surpluses and deficits are measured at:

The fair value of plan assets at the reporting date; less

Plan liabilities calculated using the projected unit credit method discounted to its present value using

yields available on high quality corporate bonds that have maturity dates approximating to the terms of

the liabilities; plus

Unrecognised past service costs; less

The effect of minimum funding requirements agreed with scheme trustees.

72




Re-measurements of the net defined obligation/asset are recognised directly within equity through other

comprehensive income / (expenditure) in the period in which they arise. The re-measurements include:

Actuarial gains and losses

Return on plan assets (interest exclusive)

Any asset ceiling effects (interest exclusive).

Service costs are recognised in the Statement of Comprehensive Net Expenditure, and include current and past

service costs as well as gains and losses on curtailments. They are included as part of staff costs.

Net interest expense (income) is recognised in the Statement of Comprehensive Net Expenditure, and is

calculated by applying the discount rate used to measure the defined benefit obligation (asset) at the beginning

of the annual period to the balance of the net defined benefit obligation (asset), considering the effects of

contributions and benefit payments during the period. The assets are shown within finance costs or finance

income as appropriate.

Gains or losses arising from changes to scheme benefits or scheme curtailment are recognised immediately in

the Statement of Comprehensive Net Expenditure.

Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.

Recognition of any surplus in the defined benefit schemes is limited based on the economic gain the BTA is

expected to benefit from in the future by means of a refund or reduction in future contributions to the plan, in

accordance with IAS 19.

Contributions are made to the British Tourist Boards’ Staff Pensions and Life Assurance Scheme (see Note 25)

in accordance with the advice of independent actuaries and are charged to the Statement of Comprehensive Net

Expenditure in the year to which they relate. Overseas pension schemes are treated similarly.

73




Standards, Amendments and Interpretations to Existing Standards not yet Effective

The application of any new or amended IFR standards is governed by their adoption by the FReM. Usually such

changes are not put into effect by the FReM until the effective date of the related IFRS, although occasionally

some changes are adopted early or may be delayed. The following standards have been published but are not

effective for the periods presented and BTA has chosen not to early adopt:

IFRS 9: Financial Instruments (from 1 January 2018)

IFRS 14: Regulatory Deferral Accounts (not endorsed by the EU)

IFRS 15: Revenue from Contracts with Customers (from 1 January 2018)

IFRS 16: Leases - Replace IAS 17 in its entirety (from 1 April 2020)

IFRIC 22: Foreign currency transactions and advance consideration (from 1 January 2018)

Annual improvements 2014 -2016 (from 1 January 2018)

Amendments to IAS 40: Transfers of Investment Property (from 1 January 2018)

IFRS 17:Insurance contracts Replace IFRS 4 in its entirety (from 1 January 2021)

IFRIC 23: Uncertainty over Income Tax Treatments (from 1 January 2019)

IFRS 15 (Clarifications) : Revenue from Contracts with Customers (from 1 January 2018)

Annual improvements 2015 -2017 (from 1 January 2019)

Amendments to IAS 19: Plan amendment, Curtailment or Settlement (from 1 January 2019)

Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures (from 1 January 2019)

Amendments to References to the Conceptual Framework in IFRS standards (from 1 January 2020)

IFRS 9: Financial Instruments (effective from 1 January 2018). It is envisaged that this standard will replace IAS

39: Financial Instruments: Recognition and Measurement in its entirety. The new standard sets out three new

areas: classification and measurement, impairment and a new hedge accounting model. The new standard will

impact the recognition and measurement of BTA’s financial instruments and will require certain additional disclosures. IFRS 9 deals with classification and measurement of financial assets and its requirements represent

a significant change from the existing requirements in IAS 39 in respect of financial assets. The standard contains

two primary measurement categories for financial assets: at amortised cost and fair value. A financial asset would

be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to

collect contractual cash flows, and the asset’s contractual terms give rise on specified dates to cash flows that

are solely payments of principal and interest on the principal outstanding. All other financial assets would be

measured at fair value. The standard eliminates the existing IAS 39 categories of held to maturity, available for

sale and loans and receivables. IFRS 9 has been adopted by the European Union for years commencing 1

January 2018.

BTA is continuing to assess the impact of IFRS 9 but the changes to recognition and measurement of financial

assets and liabilities, changes to hedge accounting activities and impairment of financial assets are not currently

considered likely to have a material impact on the organisation.

IFRS 15: Revenue from Contracts with Customers (for accounting periods beginning on or after 1 January 2018)

establishes a single comprehensive model to use in the accounting of revenue arising from customers. Its core

principle is that an entity should recognise revenue to depict the transfer of promised goods and services to

customers in an amount that reflects the consideration to which the entity is entitled in exchange for those goods

or services.

For BTA, transition to IFRS 15 will take place on 1 April 2018. BTA intends to adopt the standard using the

“modified” retrospective approach which means that the cumulative impact of the adoption will be recognised in

retained earnings as of 1 April 2018 will be restated.

74




BTA is in the process of completing its assessment of the impact of the standard on its financial statements and to date has identified the following areas that will be materially affected:

Income from commercial activities

Certain arrangements establish an agency relationship in accordance with IFRS 15, which is considered principal under existing standards. Accordingly revenue from these arrangements will be recognised on a net basis from the date that IFRS 15 is adopted. The implication is expected to impact the classification of items in the statement of comprehensive net expenditure only.

Presentation of contract assets and contract liabilities in the statement of financial position and related

disclosures

IFRS 15 requires separate presentation of contract assets and contract liabilities in the balance sheet. This will result in some reclassifications as of 1 April 2017 in relation to advance payments, accrued and deferred revenue which are currently included in other balance sheet line items. Other presentation changes are limited to additional disclosure requirements under IFRS 15 only.

IFRS 16: Leases (for accounting periods beginning on or after 1 April 2020) replaces IAS 17 in its entirety and addresses the recognition, measurement, presentation and disclosure requirements of lease agreements The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases over 12 months. DCMS has indicated that it will adopt IFRS 16 with effect from 1 April 2019, accordingly for BTA transition will take place on 1 April 2019.

IFRS 16 eliminates the classification of leases for lessees as either operating leases or finance leases as per IAS 17, and introduces a single lessee accounting model. For lessees, lease agreements will give rise to the recognition of an asset representing the right to use the leased item and a corresponding loan obligation for future lease payables. Lease costs will be recognised in the form of depreciation of the right to use asset and interest on the lease liability. Consequently, there will be a reduction in operating expenses and an increase in finance costs. The accounting for leases that are currently designated as finance leases will be largely unchanged under IFRS 16. The accounting for leases that are currently designated as operating leases will be fundamentally different to the current treatment of expensing the rental charges on a straight line basis. For lessors, IFRS 16 does not contain substantial changes compared to IAS 17, a lessor still has to classify leases as either finance or operating, depending on whether substantially all of the risk and rewards incidental to ownership of the underlying asset have been transferred. For a finance lease, the lessor recognises a receivable at an amount equal to the net investment in the lease which is the present value of the aggregate of lease payments receivable by the lessor and any unguaranteed residual value. If the contract is classified as an operating lease, the lessor continues to present the underlying assets. BTA continues to assess the impact of IFRS 16 on the financial statements, however, the changes are expected to have a material impact on the statement of financial position. BTA is continuing to assess the impact on the income statement. When IFRS 16 is adopted, BTA has to recognise the cumulative effect of application as an adjustment to opening

equity on the date of adoption, with no retrospective restatement of prior year comparatives.

75

2



Significant Accounting Estimates and Judgements

BTA makes certain estimates and assumptions regarding the future. Estimates and judgements are continually

evaluated based on historical experience and other factors, including expectations of future events that are

believed to be reasonable under the circumstances. In the future, actual experience may differ from these

estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Property, Plant and Equipment and Intangible Assets

Property, plant and equipment and intangible assets are measured at fair value depreciated over their useful lives

to their estimated residual values. Fair values, useful lives and residual values are based on management’s estimates and are periodically reviewed for continued appropriateness. Changes to estimates can result in

significant variations in carrying value and amounts charged to the Statement of Comprehensive Net Expenditure

in specific periods.

(b) Inventories

The net realisable value of, and demand for, inventories are reviewed on a regular basis and particularly at the

year end to provide assurance that it is stated at the lower of cost and net realisable value. Factors that could

impact estimated demand and selling prices include the timing and success of innovations, competitor activities,

supplier prices and economic trends.

(c) Defined Benefit Assumptions

The costs, assets and liabilities of the defined benefit schemes operated by BTA are determined using methods

relying on actuarial estimates and assumptions. Details of the key assumptions are set out in Note 25. BTA takes

advice from independent actuaries relating to the appropriateness of the assumptions. Changes in the

assumptions used may have a significant effect on the Statement of Comprehensive Net Expenditure and the

Statement of Financial Position.

76

3 Financial Instruments and Risk Management



The principal financial instruments are as follows:

Trade and other receivables

Cash and cash equivalents

Trade and other payables

Forward exchange contracts (classified as derivative financial assets/liabilities)

The following tables show financial instruments by category:

Loans and

Receivables

Financial

assets at fair

value through

profit & loss Total

Loans and

Receivables

Financial

assets at fair

value through

profit & loss Total

£'000 £'000 £'000 £'000 £'000 £'000

Financial assets

Trade and other receivables 1,817 - 1,817 3,386 - 3,386

Cash and cash equivalents 8,063 - 8,063 4,834 - 4,834

9,880 - 9,880 8,220 - 8,220

Financial

liabilities held

at amortised

cost

Financial

liabilities at

fair value

through profit

and loss Total

Financial

liabilities

held at

amortised

cost

Financial

liabilities at fair

value through

profit and loss Total

£’000 £’000 £’000 £’000 £’000 £’000

Financial liabilities

Trade and other payables 13,407 - 13,407 11,336 - 11,336

Derivative financial liabilities - - - - 16 16

13,407 - 13,407 11,336 16 11,352

2018 2017

2018 2017

77



Financial Instruments and Risk Management (Continued)

Financial instruments recognised at fair value are analysed between those whose fair value is based on:

Quoted prices in active markets for identical assets or liabilities (Level 1);

Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or

liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and

Those with inputs for the asset or liability that are not based on observable market data (unobservable

inputs) (Level 3).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is

determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.

For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a

fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs,

that measurement is a Level 3 measurement.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement,

considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement by BTA. BTA considers

observable data to be that market data that is readily available, regularly distributed or updated, reliable and

verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

There were no transfers between levels during the year, (2016/17: Nil).

Financial instruments measured at fair value are classified according to a fair value hierarchy that reflects the

significance of the inputs used in making the measurements. The derivative financial instruments recognised as

financial liabilities at fair value through profit and loss and classified as level 2 instruments is Nil (2016/17: £16k).

Financial liabilities held at amortised cost include trade payables and other short term monetary liabilit ies, which

are recognised at fair value and subsequently carried at amortised cost using the effective interest rate method.

There is no material difference between the net carrying amounts and the fair values, and consequently no

amortisation of interest on this financial liability class due to their short term nature.

BTA’s overall risk management programme seeks to minimise potential adverse effects on BTA’s financial performance.

BTA’s financial instruments comprise cash and liquid resources and various items such as trade payables and

receivables that arise directly from its operations. BTA is exposed through its operations to the following risks:

Credit risk

Liquidity risk

Market risk

In common with all other organisations, BTA is exposed to risks that arise from its use of financial instruments.

This Note describes BTA’s objectives, policies and processes for managing those risks. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in BTA’s exposure to financial instrument risks and consequently the objectives, policies and processes are unchanged from the previous period.

The Board of BTA has overall responsibility for the determination of the risk management policies. The objective

of the Board is to set policies that seek to reduce the risk as far as possible without unduly affecting BTA’s competitiveness and effectiveness. Further details of these policies are set out below:

78



Financial Instruments and Risk Management (Continued)

Credit Risk

BTA is primarily exposed to credit risk of £1.3million (2016/17: £2.7million) of trade receivables which are spread

over a range of customers and countries. BTA has recovered more than 99% of trade receivables over the last 2

years and write offs in the year 2017/18 amounted to £895 (£Nil in 2016/17).

It is group policy, implemented locally, to assess the credit risk of each new customer before entering into binding

contracts. Each customer account is then reviewed on an on-going basis (at least once a year) based on available

information and payment history.

Quantitative disclosure of the credit risk exposure in relation to trade and other receivables is given in Note 21.

Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. BTA’s main banking arrangements are with Royal Bank of Scotland. Amounts held by overseas operations with banks

are kept to a minimum.

BTA does not enter into derivatives to manage credit risk.

Liquidity Risk

The cash requirements of BTA are met mainly through grant-in-aid provided by the DCMS under the provision of

the Act. Following the Government’s objectives, BTA seeks to ensure that optimum use is made of all resources

during the financial year and so far, as is consistent with its objectives, seeks to maximise non-exchequer

resources generally through close working partnerships with the private sector and commercial activities. As a

result BTA is not exposed to significant liquidity risk.

Market Risk

Market risk arises from BTA’s interest bearing, tradable and foreign currency financial instruments. It is the risk that the fair value, or future cash flows, of a financial instrument will fluctuate because of changes in interest rates

(interest rate risk) or foreign currency exchange rates (foreign currency risk).

Interest Rate Risk

BTA is exposed to interest rate risk through its financial assets and liabilities. These financial assets and liabilities

carry no or nominal interest, thus BTA considers its exposure to interest rate risk not to be significant. Bank

balances are placed on overnight deposit at current bank deposit rates.

The group has no long term borrowings. BTA is not permitted to take out mortgages or other forms of borrowing

without explicit government guarantee and should gain DCMS’s agreement to any commitment, including borrowing. Any expenditure financed by borrowings without explicit consent from the sponsoring department and

HM Treasury would be considered irregular.

Foreign Currency Risk

Foreign exchange transaction risk arises when individual operations enter into transactions denominated in a

currency other than their functional currency.

BTA has a foreign currency policy in place, which has been agreed by the BTA Board and Audit Committee. The

latter receives reports at each meeting of the Committee on currency purchases and the outstanding position at

that time. BTA’s policy is, where possible, to settle liabilities denominated in their functional currency with the cash

generated from their commercial operations in that currency. Where considered appropriate, foreign currency

exchange forward contracts are used to control the risk of foreign currency fluctuations. At 31 March 2018, BTA

had no open foreign currency exchange forward contract commitments (2016/17: £2.6m).

79

4 Segment Information



BTA overall has determined seven reportable segments,four of which relate to both VisitBritain and VisitEngland.

The two segments for VisitBritain and one segment for VisitEngland are largely organised and managed

separately according to a combination of the nature of services provided and operational spend and geographical

location based on the management information.

The main reportable segments are as follows:

VisitBritain and VisitEngland

Marketing: International and Domestic marketing activities with the core objective of ‘inspiring travellers from overseas to visit and explore Britain’ and England both domestic and internationally;

Commercial: has responsibility for partnership activities, product development and distribution and

organising events and missions as well as trade support;

Retail: Maximise public investment through commercial activity. The retail operation was reported as part

of the Global Network in prior years;

Global Network: Delivering a global network to support tourism promotion overseas, providing an

overseas office network for all the national and regional tourist boards and for the tourism industry. By

sharing market intelligence, customer insights, local contacts and operational and execution capabilities,

VisitBritain helps its UK partners reach overseas customers and together create substantial efficiency

savings;

Strategy and Communication: Engaging industry and Government in support of its growth of the tourism

industry; Delivering the programme of activity to deliver the national tourism strategy and facilitate sector

growth;

England: has responsibility for accommodation standards and visitor attraction grading schemes and

provides advice and business support with the overall aim of improving the quality of tourism provision in

England;

Support Services and CEO Board: This segment involves the business and administration services of

VisitBritain and VisitEngland, and servicing the Board.

Measurement of operating segment income and expenditure, assets and liabilities

The accounting policies of the operating segments are the same as those described in the summary of significant

accounting policies.

BTA evaluates performance on the basis of the net expenditure i.e. excluding the effects of finance income and

notional costs. There are no inter-segment revenue streams.

Due to the nature of VisitBritain and VisitEngland’s business, assets and liabilities are not managed on a sector basis and consequently no allocation of assets and liabilities are made to individual operating segments.

80



4 Segment Information (Continued)

Commercial

Division England Global Network Marketing Retail

Strategy &

Communication

Support Services

& CEO Board BTA

Total

2017/18 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

Income 3,991 260 122 1,797 27,774 50 195 34,189

Inter-segmental revenue - - - - - - - -

Revenue from external customers 3,991 260 122 1,797 27,774 50 195 34,189

Segment deficit for the year (11,829) (6,642) (6,146) (18,327) 2,040 (4,572) (14,039) (59,515)

Net finance (costs)/income - - - - - - - (657)

Depreciation and amortisation - - - - - - - (709)

Defined benefit pension costs - - - - - - - (3,673) Defined benefit pension contribution

adjustment - - - - - - - 4,129

Segment net expenditure for the year (11,829) (6,642) (6,146) (18,327) 2,040 (4,572) (14,039) (60,425)

2016/17

Income 2,091 715 64 2,176 28,350 13 1,057 34,466

Inter-segmental revenue - - - - - - - -

Revenue from external customers 2,091 715 64 2,176 28,350 13 1,057 34,466

Segment deficit for the year (12,619) (4,639) (5,330) (20,854) 2,238 (4,679) (11,439) (57,322)

- - - - - - -

Net finance (costs)/income - - - - - - - (989)

Depreciation - - - - - - - (480)

Defined behefit pension costs - - - - - - - (2,637) Defined benefit pension contribution

adjustment - - - - - - - 2,403

Segment net expenditure for the year (12,619) (4,639) (5,330) (20,854) 2,238 (4,679) (11,439) (59,025)

VisitBritain & VisitEngland Total

81

5



4 Segment Information (Continued)

Geographical Information (Revenue by Country):

2018 2017

£'000 £'000

UK 13,571 15,699

Germany 5,503 5,172

United States Of America 4,352 1,571

France 3,172 3,019

Holland 1,488 1,890

Italy 1,145 1,371

Other Countries 4,958 5,744

34,189 34,466

Above table includes total income from all sources excluding grant in aid funding from DCMS.

Geographical information about BTA’s non-current assets is not available and the cost to produce this is

considered excessive.

Grants

Government grant-in-aid cash allocation from the Department for Digital, Culture, Media and Sport amounts to

£60.633 million including £1,166k capital (2016/17: £56.972 million including £500k capital grant-in-aid).

Other grants received (see Note 7) include £66k (2016/17: £96k) from UK Trade and Investment for part funding

partners attending trade shows overseas to promote UK tourism, £180k (2016/17: Nil) from Foreign Commonwealth

Office, and £25k Section 106 grant funding received from North York Moors National Park Authority.

82

6 Income from Activities



Gross income represents the invoiced amount of goods sold and services provided (stated net of trade discount and

value added tax) and, in the case of continuing activities, the value of work done during the year.

2018 2017

£’000 £’000

Revenue arises from:

Partnership marketing, media & publicity income 3,676 2,463

Income from exhibition, fairs & workshops 1,818 1,684

Income from Commercial activities 27,604 28,179

Quality scheme income 246 688

33,344 33,014 Total revenue

7 Other Income

2018 2017

£’000 £’000 Other grants 271 96

Office rental income 234 228

VAT Recovered* - 825

Other income 340 303

Total other operating income 845 1,452

*relates to the backdated Italian VAT refund.

BTA sub-lets properties in London and also received rental income from London & Partners, Visit Wales and

Marketing Manchester in the USA and China. For the year ended 31 March 2018, the total rental income from the

sub-let of properties was £234k (2016/17: £228k).

83

8 Employee Benefits Costs

Permanent

Staff Others Total

Permanent

Staff Others Total

£’000 £’000 £’000 £’000 £’000 £’000

Staff costs (including Directors)

comprise:

Salaries 8,037 4,103 12,140 7,676 4,467 12,143

Social Security costs 920 581 1,501 852 502 1,354

Other pension costs 3,070 87 3,157 3,054 85 3,139

Administration operating staff

costs 12,027 4,771 16,798 11,582 5,054 16,636

2018 2017

The average number of employees during the year were as follows:

Permanent (UK) staff

Other Staff

Total staff numbers

2018

Number

173

112

285

2017

Number

174

115

289

9 Other Operating Charges

2018 2017

£’000 £’000 Partnership marketing, media & publicity costs

29,919 31,292 Publishing

1,717 1,529 Commercial cost of sales and overhead cost

24,834 25,085 Quality Scheme Costs

88 81 Distribution costs

459 111 Research and evaluation

3,180 3,695 Property and support costs – overseas

2,066 2,086 Property and support costs – UK

3,229 2,567 VisitEngland Board secretariat operation costs

17 22 Irrecoverable VAT (UK and overseas)

4,199 3,780 Prior year creditors provision written off

(329) (316) Foreign exchange (gain)/loss

341 (491) Fair value adjustment on financial asset

8 (13)

Total other operating charges 69,728 69,428



84



10 Analysis of Expenditure by Programme and Administration Budget

Programme expenditure relates to the “GREAT” Image (VB), and “Holidays at Home are GREAT” (VE) Campaigns as well as the Discover England Fund paid out as grant to destinations.

Administration Programme Total Administration Programme Total

2018 2018 2018 2017 2017 2017

£’000 £’000 £’000 £’000 £’000 £’000

Partnership marketing, media & publicity costs 10,983 18,936 29,919 12,657 18,635 31,292 Publishing

366 1,351 1,717 763 766 1,529 Commercial cost of sales and overhead cost 24,834 - 24,834 25,085 - 25,085 Quality scheme costs

88 - 88 81 - 81 Distribution costs

452 7 459 18 93 111 Research and evaluation

2,247 933 3,180 2,459 1,236 3,695 Property and support costs – Overseas

1,722 344 2,066 1,603 483 2,086 Property and support costs – UK

3,229 - 3,229 2,567 - 2,567 VisitEngland Board secretariat operation costs 17 - 17 22 - 22 Irrecoverable VAT (UK and overseas)

1,382 2,817 4,199 1,315 2,465 3,780 Prior year creditors provision written off

(126) (203) (329) (304) (12) (316) Foreign exchange (gain)/loss

338 3 341 (491) - (491) Fair value adjustment on financial asset

8 - 8 (13) - (13) Employee Benefits Costs

15,660 1,138 16,798 15,529 1,107 16,636

Depreciation and amortisation 709 - 709 480 - 480

Grants Paid 67 6,419 6,486 90 5,203 5,293 Re-organisation costs

236 - 236 665 - 665

Total other operating charges 62,212 31,745 93,957 62,526 29,976 92,502

85

11 Grants Paid

2018 2017

£’000 £’000

General grants relating to Regional Tourism entities 592 1,457

Discover England grants relating to Destination entities 5,894 3,836

Total grant payments to regional and other tourism

bodies 6,486 5,293

12 Reorganisation Costs

2018 2017

£’000 £’000

Staff redundancy costs*

235 267

Other staff & recruitment costs

1 244

Legal and professional fees

Office Closure Costs

Pension enhancement costs**

- 236 - -

236

6

517

13

135

665



*Staff redundancy costs include exit packages and other related costs

** Pension enhancement costs incurred in 2017/18 was £nil (2016/17 to £135k), all relating to the BTBP pension

scheme, which was adjusted (credited) per the IAS 19 accounting requirement implemented.

Reporting of Civil Service and other Compensation Schemes - Exit Packages

Exit package cost band

<£10,000 4 - 1 - 5 -

£10,000 - £25,000 2 - - - 2 -

£25,000 - £50,000 3 2 - 1 3 3

£50,000 - £100,000 1 2 - - 1 2

£100,000- £150,000 - - - - - -

£150,000- £200,000 - 1 - - - 1

>£200,000 - - - - - -

Total number of exit packages by type (total cost) 10 5 1 1 11 6

Total resource cost £230,890 £369,811 £4,000 £32,557 £234,890 £402,368

Total number of exit packages by

cost band

2017/18 (2016/17)

Number of compulsory redundancies

2017/18 (2016/17)

Number of other

departures agreed

2017/18 (2016/17)

86

13 Net Expenditure before Finance income / (expense)

2018 2017

£’000 £’000

Net expenditure before finance cost (59,768) (58,036)



This has been arrived at after charging/ (crediting):

VisitBritain Board Members’ remuneration 71 87

VisitEngland Board Members’ remuneration 45 83

Auditors’ remuneration* 61 52

Operating lease expense:

- Land and buildings 1,864 1,750

- Vehicles and equipment 4 3

Travel, subsistence and hospitality:

- Chairman and Board Members (VisitBritain) 31 32

- Chairman and Board Members (VisitEngland) 16 8

- Employees 1,106 1,296

Depreciation (note 17) 493 263

Amortisation (note 18) 2 16 217

*The external audit fee includes £61k (2016/17: £49.5k) in respect of external audit services performed by the

National Audit Office. The fee does not include any fees for non-audit work as no such work was undertaken

during the year.

87

14 Overseas and Domestic Activities

BTA is required under the current Accounts Direction issued by the DCMS to disclose separately, expenditure on the

promotion of Britain internationally and England domestically and internationally and to disclose the expenditure

made on behalf of the ETB Board Members.

The following table reports total expenditure split between international and domestic marketing activities:

2017/18 Britain England England Total

International Domestic International

£'000 £'000 £'000 £'000

Employee benefit costs (see note 8) 12,500 4,293 5 16,798

Re-organisation staff related costs and professional fees (see note 185 51 - 236

12)

Project costs* 51,079 11,470 1,169 63,718

Operational costs**

Gross expenditure per the Statement of Comprehensive Net Expenditure

Less:-

10,135 3,033 37 13,205

73,899

18,847 1,211 93,957

Other grant income 246 25 - 271

Non-Government Funding (NGF) (see note 6 & 7) 33,313 553 52 33,918

Net finance cost (see note 15)

Net expenditure per the Statement of Comprehensive Net

(482) (175) - (657)

40,822 18,444 1,159 60,425 Expenditure

2016/17 Britain England England Total

International Domestic International

£'000 £'000 £'000 £'000

Employee benefit costs (see note 8) 12,107 4,529 - 16,636

Re-organisation staff related costs and professional fees (see note 365 287 - 652

12)

Re-organisation other costs (see note 12) 13 - - 13

Project costs* 54,111 9,657 181 63,949

Operational costs**

Gross expenditure per the Statement of Comprehensive Net Expenditure

Less:-

8,731 2,506 15 11,252

75,327

16,979 196 92,502

Other grant income 90 - 6 96

Non-Government Funding (NGF) (see note 6 & 7) 33,371 958 41 34,370

Net finance cost (see note 15)

Net expenditure per the Statement of Comprehensive Net Expenditure

(712) (277) - (989)

42,578

16,298 149 59,025



* Project costs include marketing, commercial cost of sales and research (see notes 9 and 11). **Operational costs relates to overhead costs, depreciation and amortisation (see notes 9, 17 and 18)

88

Overseas and Domestic Activities (Continued)

The allocation of expenditure between international and domestic activity is made as follows:

1. Expenditure undertaken directly for international or domestic activity is allocated directly;

2. Expenditure that is a shared resource for economic or control reasons is allocated using various ratios that

recognise the underlying impact. The criteria used for such allocation includes; time, space or allocation

recognising use of corporate resources;

3. It is not possible to split capital expenditure between domestic and international activity as the fixed assets

are shared between all areas.

2018 2017

£'000 £'000

Staff costs (see note 8) 16,798 16,636

Exceptional re-organisation staff costs (see note 12) 236 517

Exceptional re-organisation other costs (see note 12) - 148

Other operating charges (see note 9) 69,728 69,428

Depreciation & amortisation (see notes 17 & 18) 709 480

Grant paid to Regional Tourist Boards (see note 11)

BTA expenditure per Statement of Comprehensive Net Expenditure

6,486 5,293

93,957 92,502

VisitEngland Board Member's expenditures 2018 2017

£ £

Board Members’ remuneration 45,140 82,950

Employers NI & other taxes 1,708 5,850

Travel & subsistence and secretariat

Total expenditure

15,797 8,410

62,645 97,210



89

15 Finance Income and Expense

2018 2017

£’000 £’000

Finance Income:

Interest received on bank deposits

Finance expense:

Net interest cost on UK & US pension schemes (see note 25)

Net finance expense

29

29

(686)

(657)

27

27

(1,016)

(989)



16 Tax Expense

BTA is assessed for Corporation Tax in the UK on its activities, excluding those funded by grant-in-aid. Unused taxable losses carried forward to 2017/18 amount to £94.7million (2016/17: £83million) and the estimated taxable losses for 2017/18 are approximately £11.7million.

BTA is assessed for corporate tax in Germany and India and in all of these countries there is no corporate tax due.

90

17 Property, Plant and Equipment

Leasehold Fixtures fittings & improvements IT equipment equipment Total

£’000 £’000 £’000 £’000

Cost or valuation

Balance at 31 March 2016 - 328 - 328



Additions 17 429 16 462

Balance at 31 March 2017 17 757 16 790

Additions 357 428 63 848

Disposals - (148) - (148)

Balance at 31 March 2018 374 1,037 79 1,490

Accumulated depreciation

Balance at 31 March 2016 - 160 - 160

Charge for the year 8 252 3 263

Balance at 31 March 2017 8 412 3 423

Charge for the year 128 345 20 493

Disposals - (148) - (148)

Balance at 31 March 2018 136 609 23 768

Net carrying value

At 31 March 2017 9 345 13 367

At 31 March 2018 238 428 56 722

91

Property, Plant and Equipment (Continued)

Improvements to leasehold land and buildings, motor vehicles, computer equipment, fixtures, fittings and

equipment

These classes of assets are carried at fair value and are subject to revaluation under Modified Historic Cost

Accounting (MHCA). As in 2016/17, appropriate indices were used and indexation was considered to be insignificant,

accordingly no adjustment has been recognised in this regard.

Capital Commitment

As at 31 March 2018, BTA had no contractual commitment to purchase property, plant and equipment.

18 Intangible Assets

Cost or valuation

Balance at 31 March 2016

Additions

Balance at 31 March 2017 and 2018

Accumulated amortisation Balance at 31 March 2016

Charge for the year Balance at 31 March 2017 Charge for the year

Balance at 31 March 2018

Net carrying value

At 31 March 2017

At 31 March 2018

Computer software

£’000

608

42

Total

£’000

608

42

650 650

203

217

203

217

420 420

216

216

636 636

230

230

14 14



92

19 Investment in Subsidiary Undertakings

2018 2017

£’000 £’000

Cost

At beginning of the year 1 1

At end of the year 1 1

Subsidiary undertaking

VBSIPL

Country of Incorporation

India

Proportion of ownership interest at 31 March

2018 2017

100% 100%

The results of the VisitBritain Services India Private Ltd (VBSIPL) have been excluded from the consolidation on the

basis that its inclusion is not material for the purposes of giving a true and fair view.

20 Inventories

2018 2017

£’000 £’000

Finished goods and goods for resale 6,108 6,354

Total inventories

6,108 6,354



93

21 Trade and Other Receivables

2018 2017

£’000 £’000

Trade receivables 1,272 2,736

Less: provision for impairment of trade receivables

(14) (14)

Trade receivables – net 1,258 2,722

VAT receivables 83 85

Other receivables 559 664

Prepayments 968 907

Accrued income 141 46

HM Government – Section 4 grants recoverable 6 6

Less provisions for irrecoverable section 4 grants (1) (1)

Total trade and other receivables

3,014 4,429



There is no material difference between the net carrying amounts and the fair values of trade and other receivables

due to their short term nature.

There is no particular concentration of credit risk to BTA’s trade receivables as BTA has a large number of customers. The majority of customers are based in the United Kingdom.

The provision for impairment is analysed as follows:

2018 2017

£'000 £'000

At 1 April beginning of the year 14 14

Income and Expenditure statement release 1 -

Provision utilised (1) -

At 31 March end of the year 14 14

The creation and release of the provision for impaired receivables has been included in the Statement of

Comprehensive Net Expenditure under other operating charges.

BTA does not hold any collateral as security.

94

Trade and Other Receivables (Continued)

As at 31st March 2018 trade receivables of £136k (2016/17: £544k) were past due but not impaired. The ageing

analysis of these receivables are as follows:

2018 2017

£'000 £'000

Up to 90 days 133 544

Over 90 days 3 -

136 544

The carrying values of BTA’s trade and other receivables are denominated in the following currencies:

2018 2017

£'000 £'000

Pound sterling 1,932 2,437

US dollar 259 1,034

Euro 265 90

Other 558 868

3,014 4,429

22 Cash and cash equivalents

Opening Cash at bank and in hand

Movement

Closing Cash at bank and in hand

2018

£’000

4,834

3,229

2017 £’000

7,408

(2,574)

8,063 4,834



All cash in bank balances are held in commercial bank accounts

95

23 Trade and Other Payables

2018 2017

£’000 £’000

Trade payables 6,743 4,261

Other taxes and social security taxes 1,001 1,318

Other payables 797 1,031

Deferred income 437 906

Accruals 5,867 6,044

HM Government – Section 4 grants payable 6 6

Less provisions for irrecoverable section 4 grants (1) (1)

Total trade and other payables 14,850 13,565



There is no material difference between the net carrying amounts and the fair values of trade and other payables

due to their short term nature.

Maturity analysis of the financial liabilities classified as financial liabilities measured at amortised cost is as follows:

2018 2017

£’000 £’000

Up to 30 days 5,444 3,820

30 to 90 days 1,271 422

Over 90 days

6,692

13,407

7,094

11,336

The carrying values of BTA’s trade and other payables are demoninated in the following principal currencies:

96

2018 2017

£'000 £'000

Pound sterling 14,136 12,762

Euro 168 117

US dollar 327 233

Other 219 453

14,850 13,565



24 Derivative Financial Instruments

2018 2017

£'000 £'000

Forward foreign exchange contracts - liability - (16)

Total financial instruments classified as held for trading - (16)

BTA had no open foreign exchange contracts at 31 March 2018 (2016/2017 £2.6 million).

The fair value of BTA’s foreign exchange derivatives at 31 March 2017 were based on bank valuations.

The maximum exposure to derivative related credit risk at the reporting date is the fair value of the derivative

instruments in the Statement of Financial Position.

97



25 Retirement Benefits

BTA operates two post-employment defined benefit schemes for its employees, in the United Kingdom and the USA,

and defined contribution schemes in other parts of the world. BTA also operates a defined contribution scheme for

employees who started employment after 1st April 2017.

The total pension contributions cost of BTA was £3.62million (2016/17 - £3.078million), of which £953k (2016/17 -

£1.065million) is normal contribution related to BTA’s main defined benefit pension scheme, the British Tourist

Boards’ Pension Staff Pension and Life Assurance Scheme. There was also £2,518k (2016/17 - £1,338k) paid to

reduce the pension deficit as agreed with the Trustees (see Note 1), and a further £500k accrued during 2016/17 in

respect of the pension deficit recovery was paid during the year. Contributions towards defined contribution and

overseas pension schemes amounted to £149k (2016/17: £40k).

Total amounts charged for contributions to pension schemes were as follows:

2018 2017

£’000 £’000

Normal contribution 953 1,065

Pension deficit recovery contribution*

Total pension contribution to the BTBPS

2,518 1,338

3,471 2,403

Pension enhancement exceptional contributions accrued - 135

Pension deficit recovery contribution accrued - 500

Normal contribution - UK defined contribution 104 -

Normal contribution - Overseas pension schemes

Total Pension contribution

45 40

3,620 3,078

*The 2017/18 contribution figure includes £1,935k of additional voluntary contribution (2016/17 - £770k)

BTA is a participant in the British Tourist Boards’ Staff Pension and Life Assurance Scheme providing pension

benefits and life assurance for all UK permanent staff, based upon final pensionable pay.

BTA employees in the USA employed on a local status basis can join the USA defined benefit scheme.

The scheme is subject to regular actuarial valuations, which are carried out every three years. The next actuarial

valuation for the UK scheme is due to be carried out with an effective date of 31 March 2018 and for the US in

January 2019 (so both are currently underway). An actuarial valuation was carried out for both the UK and the US

schemes by Xafinity Consulting and Mercer Limited respectively as at 31 March 2016, and has been updated for the

accounting disclosure as at 31 March 2018 by the respective qualified independent actuaries. The valuation using

IAS 19 assumptions and methodology form the basis of this disclosure.

BTA also has additional pension liability of £168k (2016/17: £177k) for pension payments to ex-chairmen which are

unfunded and are included within the retirement benefit liabilities in the Statement of Financial Position.

98



Retirement Benefits (Continued)

UK BTBSPLA Scheme

The UK scheme is a multi-employer defined benefit scheme including other Tourist Boards where the employers’ contributions are affected by a surplus or deficit in the scheme, but the future service contribution rate is set at a

common level and does not reflect the liability of the individual participating employer. In accordance with IAS 19,

BTA’s share of the assets and liabilities has been identified and is reflected in the accounts.

BTA (along with the other participant employers) sponsors the British Tourist Boards’ Staff Pension and Life

Assurance Scheme, a funded defined benefit pension scheme in the UK. The scheme provides pensions and lump

sums to members on retirement and to their dependants on death. The scheme is set up as a separate trust

independent of the employers and is administered by independent trustees. The trustees are responsible for ensuring

that the correct benefits are paid, that the scheme is appropriately funded and that scheme assets are appropriately

invested.

Responsibility for making good its share of the deficit within the scheme lies with the BTA and this introduces a

number of risks for the BTA. The major risks are:

Investment risk - this is the risk of exposure to a movement in the discount rate used (high quality corporate

bonds) against the actual return of plan assets.

Interest rate risk - decreases/increases in the discount rate used (high quality corporate bonds) will expose

BTA to an increase/decrease in the defined benefit obligation.

Longevity rates - changes in the estimation of the mortality rates of current and former employees similarly

expose BTA’s defined benefit obligation measurement. Salary risk - this is the risk exposure to changes in future salaries.

BTA and the Trustees are aware of these risks and manage them through appropriate investment and funding

strategies. The Trustees manage governance and operational risks though a number of internal control policies,

including a risk register.

The Trustees ensure that the investment positions are managed within an asset-liability matching framework that

has been developed to achieve long term investments that are in line with the obligations under the pension schemes.

The objective is to match assets to the pension obligations by investing in a diversified portfolio of investments with

maturities that match the benefit payments as they fall due. These investments include a mix of equities, bonds, gilts,

annuities and property, as disclosed below. The portfolio of investments is considered to offer the best return over

the long term with an acceptable level of risk. The strategy is regularly reviewed and updated as considered

appropriate by the Trustees.

Following the valuation of the scheme in 2012 the employers agreed a deficit recovery plan with the Trustees. The

plan requires BTA to pay an annual amount in proportion to its share of the deficit. Based on the funding shortfall

and agreed contribution levels it is expected that the shortfall will be eliminated by 2033. Funding levels are set in

accordance with the scheme’s statement of funding principles as agreed with the employers. Current employer

contributions in respect of future service are 24.4% for members with a retirement age of 60, and 13.1% for members

with a retirement age of 65.

The Trustees and employers have also agreed that, if cumulative annual increases in pensionable salaries exceed

the equivalent increase in the consumer price index, additional contributions will become payable by the employers

to fund the additional increase in the scheme liabilities.

99




BTA’s share of the deficit in the UK scheme at the measurement date under the assumptions used is £31.0million

(2016/17: £26.2million). The increase in the defined benefit obligation is primarily due to changes in economic

conditions over the year resulting in changes to the assumptions used to value the scheme assets and liabilities, in

particular the discount rate and inflation rate assumptions. These resulted in an actuarial re-measurement loss of

£4.6million (2016/17: gain of £4.5million) being recognised in the year. Actual return on assets amounted to

£5.0million (2016/17: £33.7million) compared with an expected return of £4.7million (2016/17: £4.9million), while

interest on the defined benefit obligation component amounted to £5.3million (2016/17: £5.9million), resulting in a

net interest cost recognised in the Net expenditure for the year of £686k (2016/17: £1,004k).

US Pension Scheme

Similar to the UK scheme, the US pension scheme is administered by a separate fund. The board of trustees of the

fund is made up of representatives of BTA and employees (present and former). Plan assets held in trust are

governed by local regulation, as is the relationship between BTA and the trustees and their composition. The board

also has responsibility for the plan, including setting investment, contribution and other relevant policies.

The scheme is a final salary pension plan, which provides benefits to members in the form of a guaranteed level of

pension payable for life. BTA is responsible for all contributions to the scheme. The level of benefit provided depends

on a number of factors including age, years of service and retirement date compensation. Pensions in payment are

generally updated for inflationary increases in line with the retail price index. In addition to the inflationary risk, the

scheme is exposed to a number of other risks, including:

Investment risk - this is the risk exposure to a movement in the discount rate used (high quality corporate bonds)

against the actual return of plan assets.

Interest rate risk - decreases/increases in the discount rate used (high quality corporate bonds) will expose BTA

to an increase/decrease in the defined benefit obligation.

Longevity rates - changes in the estimation of the mortality rates of current and former employees similarly

expose BTA’s defined benefit obligation measurement. Salary risk - this is the risk exposure due to changes in future salaries.

The overall position of the US pension scheme reflects a net asset of £97k (2016/17: £27k). Similar to the UK scheme,

the asset in the current year was mainly caused by higher than assumed investment returns on plan assets, which

accounted for a £255k gain in the fund (2016/17: £388k). BTA employer contribution is nil for the current year, which

should continue for the foreseeable future as the trustees seek to limit the BTA’s exposure to future contributions.

100


Details of BTA’s defined benefit schemes are as follows:

Reconciliation of movement in fair value of plan assets

The movement in the fair value of plan assets over the year is reconciled as follows:

At the beginning of the year

Interest income

Administrative expenses paid

Remeasurements:

Transfers in

Return on plan assets (excluding interest)

Exchange gain/(loss)

Contributions by participants

Contributions by BTA

Contributions by BTA - previously accrued

Benefits paid

At end of year

UK scheme

£'000

176,630

4,658

(461)

117

320

0

309

3,471

658

(5,775)

Overseas (US)

scheme

£'000

2,635

94

(25)

0

161

(288)

0

0

0

(132)

2018

Total

£'000

179,265

4,752

(486)

117

481

(288)

309

3,471

658

(5,907)

UK scheme

£'000

146,454

4,920

(326)

41

28,743

0

339

2,403

0

(5,944)

Overseas (US)

scheme

£'000

2,081

81

(10)

0

307

327

0

0

0

(151)

2017

Total

£'000

148,535

5,001

(336)

41

29,050

327

339

2,403

0

(6,095)

179,927 2,445 182,372 176,630 2,635 179,265



101




UK scheme Overseas (US)

scheme

Total UK scheme Overseas (US)

scheme

Total

£'000 £'000 £'000 £'000 £'000 £'000

Composition of plan assets

Equity 93,752 2,402 96,154 92,686 2,621 95,307

Bonds 0 0 0 0 0 0

Gilts 0 0 0 0 0 0

Liability Driven Investment funds 57,250 0 57,250 55,269 0 55,269

Property 15,196 0 15,196 14,382 0 14,382

Annuities 12,464 0 12,464 13,209 0 13,209

Cash in bank 1,265 43 1,308 1,084 14 1,098

179,927 2,445 182,372 176,630 2,635 179,265

2018 2017

Reconciliation of movement in present value of defined

benefit obligation

The movement in the present value of the defined benefit

obligation over the year is reconciled as follows:

UK scheme Overseas (US)

scheme

Total UK scheme Overseas (US)

scheme

Total

£'000 £'000 £'000 £'000 £'000 £'000

At the beginning of the year (202,800) (2,608) (205,408) (175,917) (2,354) (178,271)

Interest cost (5,344) (94) (5,438) (5,924) (93) (6,017)

Current service cost (3,163) (17) (3,180) (2,241) (35) (2,276)

Past service cost 0 0 0 0 0 0

Remeasurements:

Transfers in (117) 0 (117) (41) 0 (41)

Actuarial (loss)/gain from changes in demograpic assumptions 0 0 0 0 0 0

Actuarial (loss)/gain from changes in financial assumptions (4,313) (42) (4,355) (26,086) 80 (26,006)

Actuarial (loss)/gain from experience adjustments (685) 0 (685) 1,804 (4) 1,800

Exchange gain/(loss) 0 281 281 0 (353) (353)

Contributions by plan participants (309) 0 (309) (339) 0 (339)

Benefits paid 5,775 132 5,907 5,944 151 6,095

At end of year (210,956) (2,348) (213,304) (202,800) (2,608) (205,408)

2018 2017

The weighted average duration of the UK and US schemes are 21 and 16.44 years respectively (2016/17: 20 and

16.66 years).

102


The significant actuarial assumptions were as follows:

Principal actuarial assumptions UK Scheme Overseas (US)

scheme UK Scheme Overseas (US) scheme

Discount rate on defined benefit obligation 2.50% 3.80% 2.65% 3.90%

Salary growth rate 3.05% 2.75% 3.10% 2.75%

Inflation / Pension growth rate (RPI) 3.05% 2.25% 3.10% 2.25%

Inflation / Pension growth rate (CPI) 2.30% 2.25% 2.35% 2.25%

Life expectancy on UK scheme mortality assumptions:

Retiring at the end of the reporting period:

- Male 24.7 24.6

- Female 26.6 26.5

Retiring 20 years after the reporting period:

- Male 26.4 26.3

- Female 28.4 28.3

2017/18 2016/17

The sensitivity of the defined benefit obligation to changes in the principal assumptions is presented in the table

below:

Impact on defined benefit obligation

Change in Actuarial assumption assumption Increase in assumption Decrease in assumption

UK Scheme

2017/2018

Discount rate 0.50% £19.9 million decrease £23.2 million increase

RPI Inflation rate 0.50% £22.2 million increase £19.2 million decrease

Mortality rate 1 Year £8.4 million increase £8.6 million decrease

2016/2017


RPI Inflation rate 0.50% £21.4 million increase £18.5 million decrease

Mortality rate 1 Year £8.1 million increase £8.1 million decrease

US Scheme

2017/2018


2016/2017




103


The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant.

When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same

method has been applied as when calculating the pension liability recognised within the Statement of Financial

Position.

Defined Contribution Schemes

Other schemes in place during the year to 31 March 2018 are in Germany, Belgium, India, Denmark, Norway,

Netherlands, Poland, Brazil, Sweden, Australia, Canada and GCC nations. All of these are defined contribution

schemes with the employer’s basic rate of contribution varying between 3% and 8% of pensionable salaries. The total charges for contributions to these schemes in the year were £45k (2016/17: £40k) and are included within the

total pension cost for the year. With effect from 1 April 2017, a defined contribution scheme was also introduced in

the UK for employees joining after that date, with the employer’s basic rate of contribution varying between 9% and 11% of pensionable salaries. The total charges for contributions to this scheme in the year was £104k and are

included within the total pension cost for the year.

26 Notes Supporting the Statement of Cash Flow

Cash and cash equivalents for purposes of the cash flow statement comprise the following:

2018 2017

£'000 £'000

Cash available on demand 8,063 4,834

8,063 4,834



104



27 Leases and other Commitments

The total future values of minimum lease payments (undiscounted) under non-cancellable operating leases are due

as follows:

Land & Buildings

2018

Other

2018

Land & Buildings

2017

Other

2017

£’000 £’000 £’000 £’000

Not later than one year

Later than one year and not later than five years

Later than five years

1,408

2,688

447

1

-

-

1,022

703

373

8

2

-

4,543 1 2,098 10

Sub-lease income

Land & Land & Buildings Buildings

2018 2017

£’000 £’000

Not later than one year 175 175

Later than one year and not later than five years 700 700

Later than five years 198 373

1,073 1,248

Included in lease commitments above are obligations under operating lease agreements in respect of the BTA’s premises in the UK and overseas as well as obligations under shared corporate services arrangements entered into

with the Foreign and Commonwealth Office for the provision of corporate service facilities to certain overseas offices.

Commitments include rental and related costs only.

Sub lease income relates to rental agreements entered into with subtenants on parts of the premises rented by the

BTA in the UK and overseas.

105



28 Related Party Transactions

In compliance with the FReM and IAS 24 ‘Related Party Disclosures’ requirements, details of material transactions

with government bodies and companies where Board Members, Directors and senior staff have an interest are

disclosed below. The Remuneration Report on pages 41 to 46 contain details of compensation payments made to

key management personnel.

Details of transactions and balances (over £10k) with government bodies and other entities where BTA and ETB

Board Members, directors and senior staff have an interest are as follows.

Company name Representatives Role Nature of Sales Debtor Purchases Creditor supply to balance from balance

2017/18 £'000 £'000 £'000 £'000

English Heritage Ian McCaig Trustee/Chair of Audit & Risk Committee

Marketing promotions

31 - 68 1

Belfast City Airport Katy Best Commercial Director Marketing promotions

13 - - -

London & Partners Kevin Murphy Chairman and Director Marketing promotions

615 128 484 226

Visit Wales Margaret Llewellyn

Chair, Visit Wales Tourism Advisory Board


932 101 41 -

Historic England Sally Balcombe Commissioner Marketing promotions

12 - - -

Newcastle Gateshead Initiative

Sarah Stewart CEO Marketing promotions

70 0 370 28

Beamish Museum Sarah Stewart CEO Marketing promotions

3 - - -

Roman Baths & Pump Room

Fiona Pollard Board Member Marketing promotions

3 - - -

Windsor Leadership Trust

Ian McCaig Trustee Marketing promotions

- - 5 -

1679 229 968 255

106

Company name Representatives Role Nature of Sales Debtor Purchases Creditor supply to balance from balance

2016/17

£'000 £'000 £'000 £'000

Shakespeare Penelope Viscountess Trustee

Marketing 7 - 9 -

Birthplace Trust Cobham promotions

Tourism South East

John Hoy Member Sub

Regional Committee


11 3 4 -

Historic England Sally Balcombe Commissioner Marketing promotions

12 - - -

English Heritage Ian McCaig / Sally

Balcombe Trustee /

Commissioner Marketing promotions

33 5 56 1

Make It York Lyndsey Swift Advisor Marketing promotions

107 99 40 -

Newcastle Gateshead Initiative

Sarah Stewart CEO Marketing promotions

- - 21 -

British Council

Christopher Rodrigues

Chairman


- - 28 -

170 107 158 1



29 Events after the Statement of Financial Position date

BTB Staff Pension and Life Assurance Scheme

Ongoing discussions and changes affecting the British Tourist Boards’ Staff Pension and Life Assurance Scheme are disclosed on page 8. In addition, the impact of guaranteed minimum pensions (GMP) equalisation is actively

being considered in line with best practice since the Statement of Financial Position date. A reasonable estimate

of the financial effects of these non-adjusting events is ongoing and will be reflected in the relevant future

accounting periods.

Intellectual Property Complaint

A complaint was made against the BTA on an allegation of the infringement of Intellectual Property (“IP”). In particular, it is alleged that the BTA used IP material from an exhibition known as ADA (“ADA IP”) in a previous campaign which

appeared across various digital platforms, including (but not limited to) Twitter and Facebook. This matter was

originally reported to the Committee in 2017, however, the complaint was not pursued until recently.

The complaint is still at the pre litigation stage, but the complainant has indicated that proceedings may be issued

prior to the United Kingdom’s Exit from the European Union (“Brexit Day”). Brexit Day was originally schedu led for

29th March 2019 but is now scheduled for 31st October 2019.

The complaint is unquantifiable because the potential liability cannot be estimated with a degree of certainty at the

current time.

The Annual Report and Accounts were authorised for issue by the Accounting Officer on the date of the audit

certificate.

There are no other events after the Statements of Financial Position date.

107

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Documents

Annual Report and Accounts for the Year Ended 31 March 2018 · ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 Presented to Parliament pursuant to Section 6(4) and Section